Exhibit 13
Contents

4   Letter To Shareholders
8   Forms Solutions Group
10  Promotional Solutions Group
12  Financial Solutions Group
14  Apparel Solutions Group
16  Selected Financial Data
17  Management's Discussion and Analysis
30  Ten-Year Financial Review
32  Consolidated Financial Statements
37  Notes to Financial Statements
53  Independent Auditors' Report
58  Management Report on Internal
    Control Over Financial Accounting


Financial Highlights


  Annual Summary

<TABLE>
<CAPTION>
                              Fiscal Years Ended        % Increase
                             2005            2004       (Decrease)
                             ----            ----       ----------
<S>                     <C>             <C>              <C>
Net sales               $365,353,000    $259,360,000      40.9
Earnings before income
  taxes                  37,465,000      28,890,000       29.7
Income taxes             14,506,000      10,939,000       32.6
Net earnings             22,959,000      17,951,000       27.9
Dividends                11,574,000      10,146,000       14.1
Per share of common
stock:
     Basic net earnings        1.21            1.10       10.0
     Diluted net
       earnings                1.19            1.08       10.2
     Dividends                  .62             .62         --
Weighted average number
 of shares of common
 stock outstanding -
 basic                   18,935,533      16,358,107       15.8
Weighted average number
 of shares of common
 stock outstanding -
 diluted                 19,259,550      16,601,838       16.0
</TABLE>
                                3
<PAGE>

Letter to Shareholders

This  was a year of great change. We were driven by the  goal  of
ensuring  your  Company  a  future  of  continued  success.    We
experienced more major events than during any other  in  our  96-
year  history.  The new elements of our business came  from  many
different business drivers, including government regulations, new
acquisitions,  continued growth of E-commerce, and  the  evolving
business  models of our large distributor base.  While our  staff
was  stretched  to accommodate the influx of challenges,  we  are
confident  that  the opportunities produced are  well  worth  the
effort.

With  the future in mind, the first change made was the  name  of
our  Company.  On June 17, 2004, the shareholders of our business
officially  changed its name from Ennis Business Forms,  Inc.  to
Ennis,  Inc.  As our large customer base moves increasingly  away
from  dependence  on  business forms, we  felt  it  necessary  to
recognize  Ennis' equally important moves to expand our  offering
from primarily business forms.  While our plan is to continue  to
play  a  major role in the forms industry during the  foreseeable
future, the lack of organic growth opportunities has required  us
to look to other products for growth.

Our  Mergers  and  Acquisitions program has  led  the  charge  in
guiding  Ennis  into  new  areas  of  opportunity.   Our  M  &  A
strategies  have  remained consistent for  the  last  six  years.
While we have discussed this strategy in previous communications,
I will review it due to the recent acquisitions.

Ennis'  M  & A strategy has always been a two-pronged initiative.
One element is to participate in the ongoing consolidation of the
business  forms  industry.   While  the  entire  business   forms
industry is consolidating (suppliers, manufactures, distributors,
and  trade  associations) our interest is targeted  only  at  the
manufacturing  segment.   We are confident we  have  adopted  the
right  formulas  to make a solid return in the  manufacturing  of
forms   and  will  continue  to  follow  this  model  in   future
acquisitions.   With  this in mind, we also  recognize  that  the
future of business forms is limited.  Therefore the price for the
target company must be compatible with that reality.

The  second element of our M & A strategy is a realization of the
first.   While business forms distributors are less dependent  on
forms  products, they are not going out of business.  Since Ennis
enjoys  the  largest customer base in the industry, we  chose  to
follow   our  distributors  into  the  markets  they  have   been
developing.  We found our forms distributors have expanded into a
wide   variety   of   commercial  printing,  banking   documents,
advertising specialties and apparel product offerings.  While  we
expect  every acquisition to bring its own customer base to  meet
our  expected  return of the purchase price, the  opportunity  to
expand our offering to Ennis customers is a significant plus.

The  role of E-commerce continues to develop in our industry,  as
well  as  playing  a  major role in world commerce  as  a  whole.
Ennis,  Inc. has been greatly affected by the shift  in  the  way
people  do  business.  Generally, discussion pertaining  to  this
topic  addresses  the  decline in forms use  attributable  to  E-
commerce, digital technology and computers.  That impact is  real
and  will continue.  The decline has been estimated to be between
2%  and  5%  a  year.  Our own decline has been at the  low  end,
closer  to 2%.  There is, in fact, a positive side for the  forms
business in this technological evolution.  The pre-press  process
of  printing has experienced major productive gains from the  new
technologies.  Ennis has used this technology extensively in  our
continuing challenge to control inflation.  The customer  service
advantages of the Internet and E-commerce are also being utilized
in  our  operations.   While virtually  every  Ennis  product  is
available  online, we have designed some of our  sites  with  the
distributor  base  in  mind.   Our new  Storefront  allows  Ennis
products  to be purchased online and also recognizes the business
model of a distributor that demands buying from multiple sources.
This  can  save  a  dealer considerable cost in maintaining  end-
users'  Storefronts  without abandoning their  multiple  supplier
models.

Another  significant change experienced during the past year  was
in  the area of government regulations.  While the public company
landscape has changed significantly (Congress, SEC, NYSE, and the
media), the greatest impact on our company has been made  by  the
Sarbanes-Oxley Act.  While the goals of these new regulations are
well intended, the

                                4
<PAGE>

impacts  they  have made on our business have been both  positive
and  negative.   We  strongly support the concept  of  clear  and
accurate reporting and are proud to state that this is not a  new
concept  to  Ennis.  Our Board of Directors has  always  demanded
such  reporting integrity during the long history of our company.
The   Board   has  played  an  active  role  in  overseeing   the
implementation of the new regulations and has met regularly  with
our  outside Auditors to review the Company's progress.   We  are
pleased  to  report that our controls have received  a  favorable
review.  On the mixed side of the issue, I feel that the cost and
time  involved in this process has been excessive for the limited
improvements  found.   I  hope  the regulatory  authorities  will
continue to seek a better balance of regulation with our need  to
maintain a competitive environment in the world markets.

My  final  comments  on the changes of 2005 are  related  to  our
acquisition  integration  process.   Many  business   books   and
articles  have been written concerning the perils of  integrating
an acquisition into a company.  Ennis has been fortunate that our
new  companies  have  performed well for our  shareholders.   Our
integration process begins during the negotiation period  of  the
acquisition.   Much is learned about the culture  of  the  target
company  during  this courtship process.  If the culture  appears
too  diverse to accomplish a clean integration, we will walk away
from  the deal, however if we believe the compatibility is there,
we plan the process prior to closing.  Naturally there are always
surprises after the close, but our process has helped us to avoid
experiencing  any serious problems.  Our philosophy places  great
emphasis on treating the new company as a valued member of Ennis.
As we integrate systems, benefits, suppliers and other components
of our companies, the management of the acquisition plays a major
role.  We attempt to recognize the change they are going through,
but  unfortunately  the outcome is not always  positive  for  all
parties.

Promotional Solutions Group

The Promotional Solutions Group was a creation of the second tier
of  our  M  &  A program.  We observed with great interest  as  a
growing  percentage of our customers moved into markets  such  as
Point-of-Purchase  displays, printing on  plastics,  and  various
advertising  specialty items.  Delivering such products  required
Ennis  to  adopt  new processes.  After a few minor  attempts  to
enter  these  markets through internal growth, we concluded  that
the  equipment  and  skills could be gained more  effectively  by
acquisition.  Equally important, the acquisitions allowed  us  to
obtain  a  new  customer  base to help carry  the  costs  of  the
transaction.  This strategy allowed Ennis to provide new  product
offerings  to  our  customers without loading the  costs  of  the
acquisition  onto  those  products.   This  also  alleviated  the
dreaded synergy promise that often accompanies many acquisitions.

Acquired  companies  in  the  Promotional  Solutions  Group  also
facilitated  new  relationships with a  wide  spectrum  of  media
agencies.  These agencies then brought household names such as 7-
Eleven,  Blockbuster  Video,  Sonic Drive-Ins,  Arby's  and  many
others  to  the  Ennis  customer  base.   In  addition  to  their
promotional product needs, these customers also purchase business
forms,  tags,  and apparel, which our cross-selling  efforts  are
developing,  but  are  not required to  make  the  acquisition  a
success.   We believe that the skills and ideas gained  in  these
new   ventures  are  strong  selling  points  in  our   continued
relationships with the distributor community.

Financial Solutions Group

This  group  is also a product of our acquisition program.  While
Ennis  has  owned the companies in the Financial Solutions  Group
for  less than five years, the shareholder monies used to acquire
the  companies  have already been repaid.  The  brands  of  these
companies  continue  to function as prominent and  well-respected
members of the financial forms marketplace.

We  are  observing  increased opportunities to  grow  this  group
through internal sales.  These new opportunities are coming  from
several directions.  First, the consolidation in the industry  of
suppliers  has  led to fewer competitors.  We  are  receiving  an
increasing number of new inquiries due to the smaller  supply  of
qualified  sources.  Second, the size of Ennis  has  grown  to  a
level  that  we  are  in serious contention  with  several  large
companies.   Some  large  companies are  only  comfortable  doing
business  with suppliers of a minimum revenue level.  Third,  our
acquisitions  have broadened our internal banking  relationships.
These  new  banking partners are providing printing opportunities
as  well as the additional financial resources necessary to  grow
our company.  We view these deepening partnerships as a source of
strength for both parties.

                                5
<PAGE>

Forms Solutions Group

The  Forms  Solutions Group has been the core platform  of  Ennis
since it became a public company in 1960.  As we progress into  a
new year, our dependence on business forms continues to decrease.
We  expect business forms to contribute approximately only 35% of
our  total revenue during fiscal 2006, however, we will  continue
to be profitable in our forms facilities.  Ennis has developed  a
strong  relationship with suppliers in the paper industry,  which
demonstrates a true partnership.  As our business grows, so  does
the  business of our partner companies, allowing them to  provide
Ennis  with  competitive costs for paper and other raw materials.
With  our growth the last few years, Ennis has become one of  the
largest   consumers  of  particular  grades  of  paper,   further
solidifying our price position in the market.

Since  the  first  element  of  our acquisition  strategy  is  to
participate  in the manufacturing consolidation of  the  business
forms  industry  this paper pricing stability has  been  crucial.
Equally  important has been our integration process as previously
discussed.  In the Forms Solutions Group, integration  has  often
meant application of our pricing and financial systems within our
new  acquisitions.   As with any system installation,  there  are
always  unusual  situations  to  be  corrected.   As  the   Forms
Solutions  Group  continues this process,  the  profitability  of
these  businesses is easier to assure.  We have already witnessed
the  positive  effect  this system has on our  bottom  line  when
properly applied by management at the facility level.

There are still some forms businesses we will consider adding  to
the  group for the purpose of geographic diversification or other
reasons.   At  the  same  time, we will  be  forced  to  consider
consolidations  of  plants if the facilities cannot  maintain  an
acceptable  level  of  earning  performance.   Fortunately,   our
operating personnel have been effective in avoiding the need  for
serious consolidation moves thus far.


Apparel Solutions Group

This group includes our new acquisition, Alstyle Apparel.  We had
been  considering  entry into this market for some  time  because
apparel  products  have  become a major  growth  source  for  our
distributors.  The Apparel Group section will explain the company
and its capabilities in greater detail.  This acquisition was not
based  upon  the  necessity of selling  apparel  to  our  current
customer  base.   We expect that Alstyle products  will  meet  or
exceed  our expectations without any additional sales from  Ennis
distributors,  however we have already seen great  interest  from
our  customers.  Most recently, our apparel line was featured  as
the cover story of the largest printing magazine in our industry.
We  view  that  as  a  good indication of the level  of  industry
interest.

We  mentioned  that Ennis had considered an apparel product  line
for  some time due to demand from our customer base.  Some of our
competitors have been offering distributors apparel products, but
not  manufacturing them. Instead, they have been acquiring  these
products from other sources for resale.  Our investigations found
that  this  would  provide an unacceptable margin  with  multiple
steps  to  market.  Much of Ennis' strength comes  from  being  a
manufacturer  of  the products we offer.  Our  final  reason  for
pursuing  the  acquisition was that we  wanted  to  continue  our
policy  of  not  depending on synergies to make  the  deals  work
financially.  The apparel business had to be able to stand on its
own.

Guided by these criteria, Alstyle fit the profile we were looking
for.   As  with  many  acquisitions,  timing  factors  were  also
important.  Alstyle was owned by the same group as the Crabar/GBF
properties,  which enabled the merger to close more smoothly  and
with  less expense.  While at the time of writing this letter  we
are  early in the integration process, we feel pleased about  our
progress.   Our  relationship with the  former,  Centrum  Capital
Partners,  and  the  former operating partner of  Alstyle,  Roger
Brown,  continues  to  be  excellent.  Due  to  the  progress  of
integration,  Mr.  Brown has been able  to  step  down  from  the
President role at Alstyle, but continues to assist us as  needed.
He  has  passed  the  day-to-day  role  to  Todd  Scarborough  as
announced in February 2005.

A common question regarding Alstyle concerns the threat that Asia
poses to the apparel industry.  Our research has discovered  that
our market is not affected significantly due to lead-time demands
of  the  customer base and the relatively small amount of  actual
labor required to produce our apparel products.  The majority  of
labor  involved  is  already sourced  in  Mexico.   Additionally,
Alstyle  has  gained  a  major customer who previously  purchased
apparel  in  China  for  similar  prices.   We  continue  to   be
optimistic and believe that the future holds great things for the
Ennis Apparel Group.

                                6
<PAGE>

2005 Fiscal Year Results

Revenues  for  the  fiscal  year  ended  in  February  2005  were
$365,353,000  compared to $259,360,000 in the  prior  year.   Net
earnings  for  the  fiscal  year  were  $22,959,000  compared  to
$17,951,000 in fiscal year 2004.  The increases in both  revenues
and  earnings  were primarily the result of the  acquisitions  of
Crabar/GBF, Inc., Royal Business Forms, Inc. and Alstyle Apparel.

Financial Condition

While  the Company incurred significant debt in conjunction  with
the merger with Alstyle Apparel, the Company continues to have  a
strong financial condition.  The acquisitions during fiscal  year
2005 added sustainable cash flows adequate to assure repayment of
the  approximately $120,000,000 additional debt  incurred  during
the  year in a three to four year time frame.  As of February 28,
2005,  the  current ratio was 1.8 to 1, the debt to equity  ratio
was .49 to 1, and its return on equity was 13%.


Dividend Policy

The Board of Directors considers the Company's dividend policy to
be  one  of  its most important considerations.  The Company  has
declared  a  dividend  in  one hundred twenty  seven  consecutive
quarters.  As stated during the year, the Board plans to continue
the current $.62 per share annual dividend rate after the Alstyle
Apparel merger, and has done so.

The Future

In  February  2005, Michael D. Magill was promoted  to  Executive
Vice President and Treasurer.  In conjunction with the promotion,
Mr.  Magill  assumed  responsibility for  all  of  the  Company's
printing  segments.  Beginning in fiscal 2006, the Company  plans
to  combine the Forms, Promotional and Financial Solutions Groups
into one Print Solutions Group.

This  year  will  primarily be a year  of  absorbing  our  recent
acquisitions.   Those  goals  will include  system  integrations,
marketing  opportunities and exploring scale  advantages  between
our companies.  As with M & A projects of the past, we expect  to
pay  down  the  debt absorbed by these purchases in a  relatively
short period of time.  We have been experiencing a payback period
of  three to four years and believe that range will continue with
regard to our recent additions.

As we see the cash flow from these businesses develop as planned,
we  will  again be looking forward.  The Apparel Solutions  Group
gives  us an opportunity to grow organically, something that  has
not  been  possible  in  the forms market  for  many  years.   We
continue  to  be  watchful of our debt to equity ratio  and  will
continue to maintain it in a conservative range.

The financial reporting integrity of Ennis will continue to be  a
priority.   The Board of Directors will continue to  monitor  the
evolving regulatory landscape and make the necessary adjustments,
but  we  see no system that substitutes for an ethical management
team.  We will continue to make such values a major consideration
in our hiring and retention processes.

Although  this was a year of considerable change, we  were  still
able to deliver a good return to our shareholders.  The market is
adjusting  to  our  scale  and  product  line.   We  believe  the
direction  will  be well accepted by the stock  markets  as  more
results  are  seen.  Thank you for your continued support  as  we
move into our 97th year!


Keith S. Walters
Chairman, CEO and President

                                7
<PAGE>
FORMS SOLUTION GROUP
---------------------

LAYING THE FOUNDATION

The Ennis Forms Solutions Group has always been and will continue
to  be a strong and stable entity for our customers.  Since 1909,
we  have  listened to customer needs and built our  product  line
accordingly.  With almost a century of innovation and  experience
under  our belt, Ennis is still proving itself to be a well-built
resource our customers can depend on.

The  Forms Solutions Group operates from 18 facilities across the
United  States.  By expanding into forms, financial,  promotional
and  apparel  products, Ennis has grown into a highly  successful
company  with  a  diverse product offering.  Although  Ennis  has
recently  grown  as a company, our foundation was  built  in  the
forms industry and we are steadfast in our commitment to building
success for our traditional forms customers.

MEASURING OUR PROGRESS

During  fiscal year 2005, the Forms Solutions Group grew in  both
size  and  sales  revenue, increased manufacturing  capacity  and
underwent geographic diversification through acquisition.   Ennis
was  again recognized as one of the largest manufacturers in  the
wholesale business forms industry.

Throughout  the  year, the Forms Solutions Group  was  especially
aggressive  in our expansion efforts.  The June 2004  acquisition
of   Crabar/GBF,  allowed  us  to  further  diversify  geographic
coverage,  especially in the Northeast, and  offer  manufacturing
capabilities  that  were previously outsourced.   With  locations
across  the  nation,  the  addition of  Crabar/GBF  added  6  new
facilities.   In the past, Ennis did not have the  capability  to
supply  our  customers  with  the 50" roll  products,  integrated
labels  and  variable imaging that Crabar/GBF could  offer.   The
addition  of these facilities to the Forms Solutions  Group  will
open many doors with regard to the sales of these products.

The Crabar/GBF acquisition also allowed us to combine the Ennis -
Houston  plant  that  was housed in a leased  building  into  the
corporate  owned Bellville, Texas facility.  This enabled  us  to
accommodate a short and long run facility under the same roof,  a
combination that is both unprecedented in the forms industry  and
more  convenient for customers.  The consolidation  also  allowed
both  facilities  to  improve turnaround times  on  exact  repeat
orders.  The former Crabar/GBF administrative center, located  in
Dayton,  Ohio was closed and customer service was moved into  the
individual  facilities,  consistent with Ennis'  existing  model.
Likewise,  we  were  able to consolidate the Edison,  New  Jersey
facility  into  other regional facilities in  Chatham,  Virginia;
Coshocton,  Ohio  and Medfield, Massachusetts to reduce  overhead
and realize greater efficiencies from the Crabar/GBF acquisition.

Arlington,  Texas  based  Royal  Business  Forms,  another   2004
acquisition, focuses their marketing effort within the automotive
industry.   They  typically sell their products through  numerous
automotive associations.  In addition to their traditional  forms
product  offering, Royal is very efficient in producing cut-sheet
singles.   This  capability will allow Royal to  provide  certain
base stocks for other Ennis facilities.

                                8
<PAGE>

During  fiscal year 2005, the Calibrated facility took  steps  to
improve  efficiency by focusing on its key products,  traditional
business  forms.  Accordingly, check encoding was  outsourced  to
other   Ennis  facilities  and  the  high  efficiency  cut  sheet
operation  was  fully  utilized.   As  a  result  of   the   2003
acquisition,  Ennis  was  able  to establish  relationships  with
several  major customers through their dealings with  Calibrated.
Overall,   Calibrated's  performance  during  fiscal  year   2005
included  an increase in sales, an improvement in efficiency  and
an expansion of plant capability.

BUILDING FOR THE FUTURE

The  Forms  Solutions Group has several plans  for  the  upcoming
year.   By preempting the competition with better service, higher
quality  and  more  geographic  locations,  we  look  forward  to
creating alliances with new customers and strengthening the bonds
we   have  with  our  existing  distributor  base.   Growth   and
technological advancement are also at the forefront of the  Forms
Solutions Group objectives for the future.

In  fiscal year 2006, the Forms Solutions Group plans to  upgrade
equipment  in  many  of  our  facilities  in  order  to  increase
productivity.   The  investment  in  more  efficient   technology
coupled  with  consolidations of some  existing  facilities  will
allow   our  manufacturing  plants  to  speed  production   while
maintaining   the   high   quality  of   their   products.    The
implementation of Enterprise Resource Planning (ERP)  systems  in
most  forms manufacturing plants has given managers more  control
over  the  operations of their plants.  In the upcoming year,  we
plan  to implement ERP systems in the remainder of our facilities
to   optimize  efficiency  and  performance  across  the   entire
division.

The  Ennis  Online Store will make its debut during  fiscal  year
2006.   By  offering  our customers an online solution,  free  of
charge, we intend to strengthen customer loyalty and provide  our
distributors with one more way to buy and sell our products.  The
online  stores will be self-managed by the customer and available
for  all divisions.  E-commerce has become a necessity and we are
confident  that  it will prove to be a worthwhile investment  for
all divisions of Ennis.

During  the  past  year, many key Ennis customers  secured  large
accounts  and we are looking forward to that business during  the
upcoming  year.  The Forms Solutions Group is also  confident  in
the opportunity to sell apparel products to the traditional Ennis
distributor  base.   By  acquiring  companies  and  bringing   in
prominent  brands  we  have opened up new  segments  of  existing
customers  to all Ennis divisions.  We also expect to see  growth
as  a  result  of  utilizing E-commerce to grow sales  and  build
stronger relationships by simplifying the ordering process.

The Ennis Forms Solutions Group continues to be the foundation of
the  company,  offering value to our shareholders and  customers.
We  look forward to another year of growth and stability  in  the
business forms industry.

                                9
<PAGE>

PROMOTIONAL SOLUTIONS GROUP

LAYING THE FOUNDATION

The Promotional Solutions Group consists of four companies and 10
locations  across the United States.  With each company producing
a  different category of promotional printed product, this  group
collectively  services thousands of customers with  an  array  of
diverse printing needs.

Adams  McClure  specializes in manufacturing  point  of  purchase
advertising   products  and  offers  warehousing,   kitting   and
fulfillment services.  Admore is known for manufacturing  a  wide
variety  of presentation folders, utilitarian folders, commercial
printing  and bindery.  Ennis - Wolfe City produces custom  tags,
labels,   printed  Post-it  (registered  trademark)   Notes   and
promotional  give-away items.  Finally, GenForms  specializes  in
value added custom forms, labels and form/label combinations.

With  locations  in  Denver, Colorado and  Dallas,  Texas,  Adams
McClure  provides products and services to customers  nationwide.
Well-known end users of Adams McClure products include  7-Eleven,
Blockbuster, Sonic and Burger King.  Admore sells to distributors
from  across  the  country  out  of  their  facilities  in  Bell,
California  and Macomb, Michigan.  Ennis - Wolfe City is  located
in Wolfe City, Texas and serves regionally based customers in the
Southern  United States.  Cerritos, California based GenForms,  a
former  division  of  Crabar/GBF, supplies  distributors  located
primarily along the West coast.

MEASURING OUR PROGRESS

During  fiscal  year  2005, the Promotional Solutions  Group  had
great  success  improving  efficiency, growing  sales  and  cross
selling  among  companies within the group.  We acquired  several
large   accounts  and  established  relationships  with  numerous
potential customers that we will have the opportunity to serve in
the coming years.

By  focusing on the primary business of each facility, the  group
was  able to improve efficiency.  Additionally, we took steps  to
keep  all outsourced business within Ennis.  By doing so, we were
able  to collectively promote and sell more Promotional Solutions
Group products.

The  Promotional Solutions Group realized the most growth  within
the Adams McClure subsidiary.  Throughout the year, Adams McClure
focused primarily on point of purchase advertising materials  and
promotional  products.  As a result of continuously working  with
potential  accounts  over  the  past  few  years,  Adams  McClure
recorded  significant gains during fiscal year  2005.   One  such
account  is  Dallas based Blockbuster Video, which  has  recently
developed  from  several  thousands of  dollars  in  printing  to
several  millions in printing and fulfillment.  Additionally,  we
added  Arby's, headquartered in Fort Lauderdale, Florida, to  our
list of printing customers.  Accounts such as these are served by
internal  and external ad agencies, which have become  a  growing
distributor base for Ennis.  In addition to our incredible  sales
growth,  Adams  McClure was also able to  take  advantage  of  an
expansion  opportunity.  The company owned  Connolly  Tool  plant
located  in  Dallas, Texas was recently converted into  an  Adams
McClure print fulfillment and production facility.

                               10
<PAGE>

In  addition  to  the  significant growth within  Adams  McClure,
Admore   experienced  an  immense  increase  in   the   sale   of
presentation products as well as commercial printing.  The  Wolfe
City  facility  did  well  in the sales  of  traditional  printed
products.  Additionally, the development and kickoff of  the  360
(Degree)  Custom  Label Line, a re-branding and marketing  effort
for  the existing Wolfe City and DeWitt label program, was highly
successful.   These  facilities will continue  the  360  (Degree)
Custom  Labels  marketing push and this will remain  a  continued
focus of importance for the Promotional Solutions Group.

GenForms  was  added to the Promotional Solutions Group  in  July
2004  as  a  part of the Crabar/GBF acquisition.  They  continued
their  strong  performance after becoming  an  Ennis  subsidiary.
GenForms  brings  many  new  capabilities  that  complement   our
traditional business as well as the Promotional Solutions  Group,
including their multiple color capability.

BUILDING FOR THE FUTURE

The  Promotional  Solutions Group has  many  objectives  for  the
upcoming  year.  While maintaining focus on cross  selling  among
companies  and  pursuing new accounts, we  plan  to  upgrade  our
technologies  and  further improve efficiency across  the  entire
Promotional Solutions Group.

All  companies  will continue to stay focused  on  their  primary
business  strengths.   We plan to further  coordinate  commercial
product categories and cross sell at each location so that we may
better service our customer base while maximizing the performance
of  the  group.   The Promotional Solutions Group also  plans  to
continue to focus on earning new key customers.

The  Promotional Solutions Group will utilize the income from the
business  generated  this year to invest in equipment  that  will
help  grow  sales  and better service existing customers  in  the
future.

                               11
<PAGE>

FINANCIAL SOLUTIONS GROUP

LAYING THE FOUNDATION

Both  companies that make up the Ennis Financial Solutions Group,
General Financial Supply (GFS) and Northstar, were established in
1962  and have provided dependable products and service to  their
customers  ever since.  The Financial Solutions Group offers  the
widest  selection  of financial forms in the  industry  including
internal  bank  documents, non-negotiable  documents,  negotiable
documents,  security  documents and specialized  business  forms.
The   financial   division  has  facilities  in  Brooklyn   Park,
Minnesota;   Roseville,  Minnesota;  Bridgewater,  Virginia   and
Nevada, Iowa that serve customers nationwide.

End  users  of  GFS  and  Northstar  products  include  financial
institutions,  processors  of MICR encoded  documents,  insurance
companies,   a   variety  of  government   agencies   and   other
organizations  that  require secure documents.   Day  after  day,
these customers rely on the quality and precision of the products
manufactured by the Ennis Financial Solutions Group.

MEASURING OUR PROGRESS

During fiscal year 2005, the Financial Solutions Group made great
strides  to  increase sales performance, product development  and
manufacturing efficiency.  Most impressively, Northstar continued
its  status as the leading producer of money orders in the  world
as  well  as  one  of the top 5 check producers  in  the  nation.
Northstar  printed over 5 billion lines of MICR during last  year
alone.   In  addition to these astounding achievements, Northstar
was   recognized   by   the  North  American  Security   Projects
Organization  as  one  of  the first certified  security  product
producers in North America.

Through their respective sales channels (indirect or direct), GFS
and  Northstar entered into relationships with several of the top
200 banks in the United States.  They also placed a great deal of
emphasis  on  studying the market, developing  new  products  and
expanding   existing  lines  to  meet  the  needs  of  customers.
Northstar  continued its expansion into new markets by  promoting
its secure document production capabilities.

The  changes brought about by the adoption of the Check  Clearing
for  the  21st  Century Act (Check 21) created both  threats  and
opportunities  for the Financial Solutions Group.  The  increased
use  of  check  truncation, the act of using digital  images  for
check  processing, altered the need for some financial  products.
However,  the shift opened numerous doors for product development
and  an increased demand for image compliant documents.  GFS  and
Northstar  took  full advantage of these opportunities  with  the
release  of several new and updated products and by taking  steps
to encourage image compliance among their customer base.

Most  importantly,  the Financial Solutions Group  made  numerous
modifications  to  ensure  GFS and Northstar  remain  convenient,
effective  and  profitable  sources  for  their  customers.   GFS
purchased new equipment that allowed them to increase efficiency,
in  some  cases as much as 30%, and shorten turnaround  time  for
customers.  To more effectively meet the needs of customers,  the
customer service center in Denver, Colorado, was moved to the GFS
location  in  Nevada,  Iowa.   The move  eliminated  costs  while
providing  the same level of service and created the  possibility
of opening an additional manufacturing facility on the West Coast
in the future.
                               12
<PAGE>

BUILDING FOR THE FUTURE

As  fiscal  year 2006 begins, the Financial Solutions  Group  has
several  key  objectives for the upcoming  year.   Plans  include
continuing to develop new product lines to keep up to  date  with
customer  needs.  Northstar is focused on pursuing  more  of  the
larger  banks that are not generally available to the distributor
market,  while  being careful to encourage and not  compete  with
distributors  already  serving these  banks.   Additionally,  the
Financial  Solutions  Group  has a desire  to  expand  into  non-
financial markets and profit from manufacturing secure forms.

A  comprehensive  branding push is currently  underway  for  both
Northstar  and  GFS.   Not  only will these  efforts  update  the
perception  and  message of the brands, but it  will  allow  each
company  to  better concentrate on and reach its  primary  target
market.   The re-branding will focus on the experience, precision
and  extensive product line available through the Ennis Financial
Solutions Group.

By  finding  new ways to help their sales channels  grow  and  by
training   their  distributors  to  sell  financial  forms,   the
Financial  Solutions Group intends to strengthen its  sales  base
and  attract new customers.  With plans to expand product  lines,
pursue new markets, improve sales through the indirect market and
possibly  open an additional facility, the next year is  sure  to
hold considerable growth for the Financial Solutions Group.

                               13
<PAGE>

APPAREL GROUP

LAYING THE FOUNDATION

The  most  recent  Ennis  acquisition,  Alstyle  Apparel,  is   a
California   based   activewear  manufacturer   with   tremendous
potential for growth.  Alstyle built its foundation in 1976 as  a
small  company  importing  t-shirts for  local  screen  printers.
After  quickly becoming the nation's largest distributor of Fruit
of the Loom and Hanes products, Alstyle began manufacturing their
own line of high-quality t-shirts in 1990.  They have since grown
into   a   large  apparel  manufacturer  and  currently   operate
manufacturing and distribution facilities across the  nation  and
abroad.

Ennis  acquired Alstyle Apparel on November 4, 2004 in a tax-free
exchange of stock.  The merger will allow Alstyle to supply Ennis
distributors  with products that we previously could  not  offer.
The  rapid  growth  and  success that  Alstyle  has  historically
demonstrated  will  likely continue with the  prospect  of  cross
selling to Ennis customers.  Likewise, the Promotional, Forms and
Financial Groups of Ennis will have the opportunity to sell their
products to Alstyle's existing customer base.


MEASURING OUR PROGRESS

Alstyle  is  known for the high quality of its products  and  its
wide  array  of  available  colors.  Most  manufacturers  in  the
apparel  industry are based overseas, with the majority of  their
product  being  produced outside of the United  States.   Alstyle
Apparel  has  made  it  a priority to ensure  that  most  of  our
manufacturing  remains in the United States.  As  a  result,  the
higher  quality  and stricter standards by which our  apparel  is
produced make purchasing the Alstyle product a better choice  for
many consumers.

Our  garments  are crafted from yarn that has been  grown,  spun,
knitted  and  dyed in the United States and then  cut,  sewn  and
finished  at  a  plant  in the U.S., Mexico or  Caribbean  Basin.
Alstyle is headquartered in Anaheim, California with distribution
centers  in  Anaheim, Chicago, Philadelphia, Atlanta, Dallas  and
Canada.  We offer fashions for men, women, juniors and youth in a
broad range of sizes and colors.  Alstyle products include a wide
variety  of  apparel ranging from tees and fleece to  shorts  and
hats.   Our  products  are sold under several well-known  company
owned  brands as well as customers' re-label and private labeling
programs.   With  a customer base consisting of screen  printers,
embroiderers  and  various other businesses  that  specialize  in
apparel  embellishment,  Alstyle  services  a  wide  variety   of
customers across North America.

During  calendar  year 2004, Alstyle experienced  record  growth.
With the release of several new products, our sales averaged  15%
over  the  previous  year's and we were able  to  outperform  the
growing  apparel  industry by over 9%.  During  a  typical  week,
Alstyle uses 1.6 million pounds of cotton and manufactures 49,000
dozen shirts each day.  With numbers like this, it is easy to see
why  apparel  and  headwear are exciting opportunities  for  many
Ennis customers.

                               14
<PAGE>

BUILDING FOR THE FUTURE

As we continue into 2006, Alstyle Apparel has highlighted several
objectives  for the coming year's performance.  These  objectives
include  growing  our customer base, releasing new  products  and
expanding manufacturing capabilities.

With the opportunity to sell to existing Ennis customers, we plan
to  expand  our  customer base to include  businesses  that  have
already established relationships with other divisions of  Ennis.
Early  in fiscal year 2006, Ennis versions of the Alstyle Apparel
catalog  will  be mailed to Ennis' traditional distributor  base.
As  of  March 1, Ennis distributors will be able to order apparel
products through a centralized number with their current customer
numbers  and  credit  agreements.   These  steps  will   add   an
additional 50,000 potential resellers of the apparel product,  an
exciting opportunity and challenge at the same time for Alstyle.

We  will  be releasing a multitude of new products during  fiscal
year  2006.   With the addition of two headwear  lines,  a  pant,
short  and  several sheer jersey products, we are  excited  about
expanding  our  product offering beyond t-shirts into  additional
high-demand   product   lines.    We   are   expanding   in-house
manufacturing capabilities and equipment to include product lines
that  are  currently outsourced.  Additionally, we have opened  a
sourcing  office  to manage existing and future import  business.
Expanding   internal   capabilities   while   developing   import
opportunities  will allow Alstyle to determine the best  possible
solution scenario to keep costs low which will improve our margin
and keep customers' pricing in line with industry benchmarks.

Alstyle has a history of extreme growth and profitability.  As  a
part  of  Ennis,  we  are confident that  we  will  maintain  our
position as an innovative, successful and profitable company  and
we  look  forward to what the future holds for the Ennis  apparel
line.

                               15
<PAGE>

<TABLE>
Selected Financial Data
<CAPTION>
Fiscal Years      2005       2004        2003       2002       2001
Ended
(In thousands, except per
share amounts)
<S>            <C>         <C>        <C>        <C>         <C>
Net sales       $365,353   $259,360     $240,757  $236,923   $229,186
Net earnings      22,959     17,951       15,247    14,966     13,177

Per share of
common stock:
   Basic net
     earnings       1.21       1.10          .94       .92        .81
   Diluted net
     earnings       1.19       1.08          .93       .92        .81
   Dividends         .62        .62          .62       .62        .62
Total assets     497,246    154,043      152,537   139,034    142,854
Long-term debt   112,342      7,800       18,135     9,170     23,555
</TABLE>

In  November  2002,  the Company acquired Calibrated  Forms  Co.,
(Calibrated)  which  accounted for  the  increase  in  sales  and
earnings  in Fiscal 2003 and 2004 and also the increase in  total
assets  in  fiscal  year  2003.  The Calibrated  acquisition  was
financed  with an additional $15,000,000 in debt.  During  fiscal
year 2005, the Company completed acquisitions which accounted for
the  increases in net sales, net earnings, total assets and long-
term  debt (see details of the acquisitions in footnote 9 in  the
accompanying notes to consolidated financial statements).






                               16
<PAGE>

Management's Discussion and Analysis

Overview

Ennis  Business Forms, Inc. was organized under the laws of Texas
in  1909.   On  June 17, 2004, the shareholders approved  a  name
change from Ennis Business Forms, Inc. to Ennis, Inc.  The change
was  made to recognize the declining importance of business forms
to  the  overall organization.  Ennis, Inc. and its  subsidiaries
(collectively "Ennis" or the "Company") prints and  constructs  a
broad line of business forms and other business products and also
manufactures  a  line  of activewear for distribution  throughout
North  America.  Distribution of all of these products throughout
the  United  States  and Canada is primarily through  independent
dealers  and  with respect to activewear products, through  sales
representatives.    This  distributor  group  encompasses   print
distributors,  stationers,  quick  printers,  computer   software
developers,   activewear   wholesalers,   screen   printers   and
advertising agencies, among others.

On  June  25,  2004,  the Company announced  it  had  reached  an
agreement   to  purchase  all  of  the  outstanding   shares   of
Crabar/GBF,  Inc., (Crabar/GBF) a privately held  business  forms
manufacturer  with  $69,000,000 in revenues in  its  most  recent
fiscal  year.   The  purchase  price  in  this  transaction   was
$18,000,000 in cash and assumed debt. This amount, plus costs  of
acquisition, totaled $18,260,000.  This transaction was  financed
from internal cash and borrowings from the then existing line  of
credit  held by the Company.  This transaction closed as of  June
30, 2004.

On  June  25,  2004,  in  a  separate announcement,  the  Company
announced an agreement to merge Centrum Acquisition, Inc. and its
wholly  owned  subsidiary,  which did  business  under  the  name
Alstyle Apparel (collectively Alstyle) into a subsidiary  of  the
Company.    Alstyle,   based   in   Anaheim,   California,    had
approximately  $200  million in revenues and 3,500  employees  in
North  America at the time of the announcement.  Under the  terms
of  the  transaction,  Alstyle shareholders would  receive  Ennis
shares  based upon a $242,000,000 valuation of Alstyle less  debt
outstanding as of the day of merger (approximately $104 million).
This  amount,  plus  costs of acquisition, totaled  $246,486,000.
Completion  of  this transaction was subject to approval  of  the
Ennis  shareholders  to  issuance of 8,803,583  shares  of  Ennis
common  stock,  which  was  approved at  a  special  shareholders
meeting  on November 4, 2004. The Company also announced  it  had
entered  into a committed line of credit from LaSalle Bank,  N.A.
for  $100,000,000  in  Revolver  credit  facilities  and  up   to
$50,000,000 in Term credit facilities for a total of $150,000,000
in  new  financing.  The merger with the parent  of  Alstyle  was
completed   on  November  19,  2004.   On  a  pro  forma   basis,
considering  all  acquisitions completed in  2005,  the  combined
company would have had $567,700,000 in sales for the fiscal  year
ended  February  28, 2005 and $545,686,000 for  the  fiscal  year
ended February 29, 2004.  Pro forma net earnings would have  been
$30,595,000 for the fiscal year ended 2005, or $1.08  per  share-
diluted, and $18,062,000 for the fiscal year ended 2004, or $0.70
per   share-diluted.   The  pro  forma  EBITDA  (earnings  before
interest,  taxes, depreciation and amortization) would have  been
approximately  $75,000,000 for the fiscal  year  ended  2005  and
$70,000,000 for the fiscal year ended 2004.  After payment of pro
forma  dividends  and pro forma capital expenditures  (free  cash
available  for  payment of principal, interest and  taxes)  would
have  been  $34,000,000 for fiscal year 2005 and $36,000,000  for
fiscal year 2004.

Also  on November 1, 2004, the Company announced an agreement  to
acquire  Royal Business Forms, Inc., (Royal) an Arlington,  Texas
based  manufacturer  of business forms for  $3,700,000  in  Ennis
common  stock.   This amount, plus costs of acquisition,  totaled
$3,827,000.  Approximately 178,000 shares of treasury stock  were
issued  in  this  transaction. There was no debt on  the  balance
sheet  of  Royal other than trade payables and accrued  expenses.
Royal had revenues of $12,100,000 in its most recent fiscal year.

In February of 2005, the Company announced a change in management
in which the Forms Solutions, Promotional Solutions and Financial
Solutions  Groups  began reporting to a newly  created  executive
officer position. This officer reports to the

                               17
<PAGE>

President  and  CEO, as does the President of the Apparel  Group.
The  Company  will now report in two operational segments  -  the
Printing Segment and the Apparel Segment.  The three groups which
were   previously  considered  individual  segments   have   been
aggregated  into  the Printing Segment based  on  the  relatively
similar  nature  of  the product, product process,  customer  and
distribution  methods.   Information on the  four  groups  within
these  two  segments is presented under note 11 to the  financial
statements.

The  first  group  in the Printing Segment, the  Forms  Solutions
Group,  is primarily in the business of manufacturing and selling
business  forms and other printed business products primarily  to
distributors  located  in  the  United  States.  Except  for  the
Cerritos,  California operation acquired in the Crabar/GBF,  Inc.
transaction, all of the remaining Crabar/GBF, Inc. operations and
Royal  were added to the Forms Solutions Group. The second  group
in  the  Printing  Segment, the Promotional Solutions  Group,  is
comprised  of  Adams McClure (design, production and distribution
of printed and electronic media), Admore (presentation products),
Wolfe  City  (flexographic printing, advertising specialties  and
Post-it  (registered trademark) Notes) and the Cerritos facility.
The  third group in the Printing Segment, the Financial Solutions
Group  designs,  manufactures  and  markets  printed  forms   and
specializes  in  internal  bank  forms,  secure  and   negotiable
documents  and  custom  products. This group  sells  through  the
Northstar  brand  name  as  well  as  the  GFS  brand   name   to
distributors.  The  second segment, the Apparel  Solutions  Group
consists   entirely   of  the  manufacturing   and   distribution
operations   of  Alstyle,  which  manufactures  and   distributes
activewear  (t-shirts  &  fleece  goods).   As  the  Company   is
presently structured, the Apparel Solutions Group will become the
largest single segment of the Company.

Economic pressure and the contraction of the traditional business
forms  industry continue to impact each segment of  the  Company.
As  a  result, the Company continues to concentrate  on  reducing
other  costs where sales are declining.  The installation of  the
Company's Enterprise Resource Planning Software (ERP) System  has
decreased the waste in materials and reduced labor in the  plants
that  have the system.  The Company is continuing to install  the
ERP  System throughout the organization.  The Company  will  also
install  the system into its newly acquired companies,  including
Alstyle.

The Company is also focusing on increasing sales where the market
is  expanding.   There are opportunities in the  Promotional  and
Financial Solutions Groups to increase sales organically and  the
Company is actively pursuing that direction. The Company believes
that  growth  in  the Forms Solutions Group will occur  primarily
through acquisitions.  In addition, the Company will continue  to
search for acquisition opportunities that will expand the mix  of
products  away  from  traditional forms,  as  well  as  strategic
acquisitions within the traditional forms industry.

Business Segment Overview

Printing Segment
----------------
Forms  Solutions  Group  -  The Forms  Solutions  Group  operates
through  16 manufacturing locations throughout the United  States
and  had  approximately $178,000,000 a year in sales  for  fiscal
year 2005.  The segment provided a majority of

                               18
<PAGE>

the pre-tax profitability for the Company in fiscal year 2005  at
approximately  $26,000,000 in pre-tax profits  or  53.8%  of  the
gross  pre-tax  profits before corporate expense allocation.   In
fiscal  year  2006,  this  profitability percentage  should  drop
dramatically  as  the  Apparel group is expected  to  generate  a
significant  amount  of sales and profitability  to  the  overall
Company.   The  Forms Solutions Group sells through approximately
40,000   private   printers  and  independent  distributors   and
therefore  sales reflect a smaller percentage of selling  expense
than  would  exist in companies who market directly  to  the  end
user.   The  products sold include snap sets,  continuous  forms,
laser cut sheets, tags & labels, integrated products, jumbo rolls
and  pressure sensitive products in short, medium and  long  run.
The  Group  sells  under the Ennis, GenForms,  Witt  Printing,  &
Calibrated brand names.

Promotional  Solutions  Group - The Promotional  Solutions  Group
operates  in  11 facilities in four states and had  approximately
$84,000,000 in sales for fiscal year 2005, which is substantially
higher than the $67,000,000 recorded in fiscal 2004. Part of this
increase  is  the inclusion of the Cerritos, California  facility
acquired in the Crabar/GBF acquisition as part of the Promotional
Solutions Group.  The remainder of the increase comes through the
addition  of  several large customers during  2004.   This  group
operates  under the Adams-McClure brand (which provides Point  of
Purchase advertising for large franchise and fast food chains  as
well  as  kitting  and  fulfillment);  the  Admore  brand  (which
provides presentation folders and documents); Ennis Tags &  Label
(which   provides  tags  &  labels,  promotional   products   and
advertising  concepts); and GenForms, (which  provides  short-run
and  long-run label production).  With respect to Adams  McClure,
the  business is generally provided through advertising agencies.
The   other   facilities  receive  business  through  independent
distributors.

Financial  Solutions Group - The Financial Group  operates  in  4
facilities  located  in three states and generated  approximately
$48,000,000  in  sales for fiscal year 2005.  This  is  the  only
group  that  showed a decline in sales from fiscal year  2004  of
approximately  $2,000,000, primarily due to the loss  of  several
large  customers, and a general decline in business  in  the  GFS
brand  sold  by distributors.  The Group, however,  did  show  an
increase in profitability and provided 15.4% of the overall  pre-
tax  profitability  before  corporate expense  allocations.   The
Financial  Group  sells directly to customers  and  to  resellers
through a sales staff (Northstar) as well as through distributors
(Northstar and GFS).  Northstar has redirected its focus to large
banking  organizations on a direct basis (where a distributor  is
not  acceptable  or available to the end-user) and  has  acquired
several of the top 200 banks in the United States and is actively
working on other large banks within the top 200 tier of banks  in
the United States.

Apparel Segment
----------------
Apparel Solutions Group - The Apparel Segment operates through  6
manufacturing  facilities  in  California  and  Mexico.   Alstyle
markets  high quality knit basic activewear (t-shirts, tank  tops
and   fleece)   across  all  market  segments.   Alstyle   offers
approximately 55 different items comprised of approximately 3,500
stock  keep  units  or SKUs. Approximately 88% of  Alstyle's  net
sales  are  derived  from t-shirts, and 94% are  domestic  sales.
Alstyle's various branded product lines include the following:

     AAA (registered trademark) - The AAA line is Alstyle's high-
end  6  ounce  product line that is pre-approved by many  of  its
retail  customers.  Short  sleeve and long  sleeve  products  are
available from juvenile to adult sizes up to 6X, in a variety  of
colors.  AAA is Alstyle's best selling product line. This product
line  is  also  offered  under the Murina (registered  trademark)
brand  name in limited quantities and is manufactured exclusively
in, and marketed as, made in the USA.

   Gaziani   (registered   trademark)   -   Gaziani   (registered
trademark)  is a higher-margin, women's activewear line  that  is
more style-focused than Alstyle's other product lines.

   Diamond   Star   (registered   trademark)   -   Diamond   Star
(registered  trademark) is a softer, high-quality  ringspun  that
commands a higher price point.

                               19
<PAGE>

   Tennessee  River  (registered  trademark)  -  Tennessee  River
(registered  trademark)  is  a  5.5-ounce  value  offering   that
complements Alstyle's AAA product.

Sales  from  Alstyle  totaled approximately $56,000,000  for  the
fiscal  year  2005,  (reflecting the  period  from  the  date  of
acquisition to February 28, 2005).  If Alstyle had been  acquired
at  the beginning of our fiscal year, its total sales would  have
been  approximately $200,000,000, or 35.6% of  pro  forma  sales.
From   a  profitability  standpoint,  while  the  apparel   group
contributed  approximately $4,000,000 in pre-tax  profits  before
corporate expense allocations, they would have been significantly
greater for the full year.

Alstyle  is headquartered in Anaheim, California where they  knit
domestic  cotton  yarn  and some polyester  fibers  into  tubular
material.   They dye the material at that facility and then  ship
the dyed material to plants in Ensenada or Hermosillo, Mexico  to
cut  and  sew  into finished goods. Alstyle also  ships  a  small
amount of their dyed and cut product to El Salvador or Costa Rica
for  sewing.  After sewing and packaging is completed, it is then
reshipped   to  Anaheim  where  it  is  either  stored   at   the
distribution  center in Anaheim, or re-directed  to  distribution
centers  in  Los Angeles, California; Chicago, Illinois;  Dallas,
Texas;   Philadelphia,   Pennsylvania;   Atlanta,   Georgia    or
Mississauga, Canada.

Alstyle utilizes a customer-focused internal sales team comprised
of  19  sales  representatives assigned  to  specific  geographic
territories   in   the   United   States   and   Canada.    Sales
representatives  are allocated performance objectives  for  their
respective territories and are provided financial incentives  for
achievement of their target objective. Sales representatives  are
responsible for developing business with large accounts and spend
approximately  half their time in the field.  Alstyle  employs  a
staff  of  customer service representatives that  handle  call-in
orders  from smaller customers. Sales personnel sell directly  to
Alstyle's  customer  base,  which consists  primarily  of  screen
printers, embellishers, retailers, and mass marketers.

A  majority  of  Alstyle's sales are related to direct  customer,
branded  products and the remainder related to private label  and
re-label  programs. Generally, sales to screen printers and  mass
marketers are driven by the availability of competitive  products
and  price  considerations,  while sales  in  the  private  label
business are characterized by slightly higher customer loyalty.

Alstyle's most popular styles are produced based on forecasts  to
permit  quick shipment and to level production schedules. Alstyle
offers  same-day shipping and uses third party carriers  to  ship
products to its customers.

Alstyle's sales are seasonal, with sales in the first and  second
quarters  generally  being  the  highest.  The  general   apparel
industry  is  characterized by rapid shifts in fashion,  consumer
demand  and  competitive pressures, resulting in both  price  and
demand volatility. However, the imprinted activewear market  that
Alstyle sells to is "event" driven. Blank t-shirts can be thought
of  as  "walking  billboards" promoting movies, concerts,  sports
teams,  and  "image" brands. Still, the demand for any particular
product  varies from time to time based largely upon  changes  in
consumer  preferences  and general economic conditions  affecting
the apparel industry.


Liquidity and Capital Resources

Cash Flow

Cash provided by operating activities amounted to $20,046,000  in
fiscal year ended 2005, approximately $6,203,000, or 23.6%  lower
than  the  $26,249,000 provided in fiscal year  ended  2004.  The
decrease  was  the result of higher than normal cash requirements
in  the  areas  of receivables, inventories and accrued  expenses
generated  primarily  by  post-acquisition  activities.    During
fiscal  year  2005, the Company obtained $114,200,000  from  debt
issued to finance acquisitions, and expended

                               20
<PAGE>

$115,429,000  to complete the acquisitions.  Capital expenditures
of  $6,143,000  and dividends of $11,574,000 were primarily  paid
from  operating cash flow.  Cash provided by operations in fiscal
2006  is expected to increase to new levels, principally  due  to
the  new structure and size of the Company.  It is expected  that
excess  cash  flows  generated in fiscal year 2005,  will,  after
payments  of  dividends of approximately $15,760,000 and  capital
requirements  between $5,000,000 and $7,000,000, be  directed  to
repayment of debt.  The Company must receive permission from  its
banking group to increase its dividend rate or to engage  in  any
buyback of shares.

Working Capital
The  Company  maintains a strong financial position with  working
capital at February 28, 2005 of $67,790,000, an increase of 77.4%
from the beginning of the year, and a current ratio of 1.8 to  1.
The  increase in working capital is primarily due to the  working
capital   acquired   in  the  Crabar/GBF,   Alstyle   and   Royal
transactions.    The  Company  has  $10,694,000   in   cash   and
equivalents at February 28, 2005.


Credit Facility

The  Company  has $134,044,000 in outstanding debt.  On  November
19,  2004,  in conjunction with the Alstyle merger,  the  Company
entered into a new credit facility with a group of lenders led by
LaSalle  Bank  NA.   The  facility  consists  of  a  $100,000,000
revolver and a $50,000,000 term note bearing interest at the rate
of  LIBOR  plus 1.50%.  The rates on the facility may  vary  from
LIBOR  plus  0.75%  to LIBOR plus 1.75% depending  upon  leverage
ratios  as  determined  quarterly.  At the closing,  the  Company
borrowed the entire $50,000,000 available under the term note and
$56,626,000  under the revolver.  The proceeds  were  applied  to
repayment of $77,873,000 of assumed debt, $20,329,000 applied  to
the  Company's former credit facility, $3,924,000 as  contractual
payments for selling shareholders and expenses and $4,500,000 for
working  capital. Subsequent to the end of the fiscal  year,  the
Company borrowed an additional $5,000,000 under the revolver.  By
the  terms  of the credit agreement, the Company is  required  to
make $2,500,000 quarterly payments on the term loan beginning  in
March  2005.   It is the intention of the Company to utilize  its
existing  cash flow to pay down the revolver.  Since the  end  of
the fiscal year, the Company has made the quarterly term payment,
repaid  approximately  $4,000,000 of the  capitalized  leases  of
Alstyle   and  reduced  the  revolver  by  $2,000,000.    It   is
anticipated  that the available line of credit is  sufficient  to
cover,  should  it be required, working capital requirements  for
the next twelve months.

Alstyle  sells  substantially all of its account  receivables  to
factors  based  on  agreements with four financial  institutions.
Under these agreements, the factoring institutions will typically
purchase the customer account receivable on a non-recourse basis,
and  fund  80%  to  85% of the receivable amount  to  Alstyle  at
purchase and the remainder upon collection by the factor from the
end  customer,  net  of  factoring fees and  commissions.  Factor
advances were $24,675,000 at fiscal year end 2005 with $3,294,000
due   from   factors  upon  collection  from  the  end  customer.
Outstanding  advances  bear  interest  at  the  prime  rate   (as
defined).  At  February  28,  2005, approximately  $1,200,000  in
factored  receivables are recourse (at risk) to  Alstyle  in  the
event the related customer defaults on its payment to the factor.
Such  factoring agreements are generally renewable on  an  annual
basis.

Over  the  next  year or two, these receivables  will  be  funded
through  the  existing  bank  line  or  through  working  capital
generated by Alstyle. As such, the amount of receivables factored
will  decline and the amount of accounts receivable on the  books
of  Alstyle  will increase. It is anticipated that  Alstyle  will
analyze  what additional credit department resources it may  need
before eliminating the factoring agreements.

                               21
<PAGE>

Pension

The  Company  is  required to make contributions to  its  defined
benefit pension plan.  These contributions are required under the
minimum  funding  requirements of the Employee Retirement  Income
Security  Act (ERISA).  The Company anticipates it will pay  from
$2,500,000  to  $3,000,000 for the fiscal year ended  2006.   The
Company  made  pension contributions in the amount of  $2,880,000
for the fiscal year ended 2005.

Inventory
The  Company believes current inventory levels are sufficient  to
satisfy  customer demand and anticipates having adequate  sources
of  raw  materials  to  meet future business  requirements.   The
Company  entered into a long-term arrangement with its  principal
paper  supplier,  MeadWestvaco, to provide paper  at  contractual
rates.  The Company, through its Alstyle subsidiary, also entered
into a long-term contract with its yarn supplier, Parkdale Mills,
to  convert  cotton to yarn at contractual rates.  This  contract
allows  Alstyle to commit to future cotton shipments  in  amounts
and  at  prices  based upon the current estimates of  cotton  for
future  delivery.  It also provides Alstyle with some ability  to
elect  to  purchase cotton at current market rates should  cotton
prices  decline between the original order date and the  expected
delivery  date. The Company will continue to assess the price  of
raw  cotton  and seek ways to mitigate price swings, which  could
impair   manufacturing  margins.   The  Alstyle  business   model
requires a great deal more finished goods inventory than does the
printing  side of the Company's business.  Given that  demand  in
the  activewear industry is greater than the ability  to  produce
activewear products, the Company anticipates that finished  goods
inventory  will continue at the levels sufficient to  supply  the
seasonal  demands of Alstyle's customer base. Alstyle's  finished
goods inventory generally turns 3 to 4 times a year.

Capital Expenditures

Capital expenditures for the next fiscal year are expected to  be
between $5,000,000 and $7,000,000 and are expected to be financed
through  existing  cash flows. The Company  expects  to  generate
sufficient cash flow from its operating activities to  more  than
cover  its  operating  and  other capital  requirements  for  the
foreseeable future.

Commitments
The following table aggregates the Company's expected contractual
obligations and commitments subsequent to fiscal year ended 2005:
<TABLE>
<CAPTION>                Payments due by period (in thousands)
                         -------------------------------------
                                                             2010 and
                   2006       2007       2008      2009     thereafter
                   ----       ----       ----      ----     ----------
<S>              <C>        <C>        <C>       <C>           <C>
Term facility    $10,000    $10,000    $10,000   $10,000       $10,000
Revolving credit
facility
(estimated)       13,675     24,926     24,899        --            --
Other              9,743      8,155        771       167            43
Capital lease
obligations          929        593        117        24            --
Operating lease
obligations       11,718      7,228      6,400     4,683         2,889
</TABLE>

                               22
<PAGE>

Accounting Standards

In July 2002,  the  Public Company Accounting Reform and Investor
Protection  Act  of  2002  (the  Sarbanes-Oxley Act) was enacted.
Section   404   stipulates   that   public  companies  must  take
responsibility  for  maintaining  an effective system of internal
control.  The  Act  requires  public  companies  to report on the
effectiveness  of  their  control  over  financial  reporting and
obtain  an  audit report from their independent registered public
accountant  about  management's  report. The Act requires certain
public  companies (accelerated filers) to report on the company's
internal control  over financial reporting for fiscal years ended
on  or  after  November  15,  2004.  Other public companies (non-
accelerated   filers)   must   begin   to  comply  with  the  new
requirements related to internal control over financial reporting
for their  first  fiscal  year  ending on or after July 15, 2006,
under the latest extension granted by the Securities and Exchange
Commission.

In November 2004, the Financial Accounting Standards Board (FASB)
issued  Statement  of Financial Accounting Standards  (SFAS)  No.
151,  "Inventory Costs - an amendment of ARB No. 43, Chapter  4".
This  statement clarifies the accounting for abnormal amounts  of
idle facility expense, freight handling costs and wasted material
(spoilage). This statement requires that these types of costs  be
recognized  as current period charges. SFAS No. 151 is  effective
prospectively  for inventory costs incurred during  fiscal  years
beginning after June 15, 2005, with earlier application permitted
for  such  costs  incurred during fiscal  years  beginning  after
November  24, 2004.  Management does not expect the  adoption  of
SFAS  No.  151  to  have a significant impact  on  the  Company's
financial   statements  as  the  Company's  current   method   of
accounting for inventory costs are consistent with this standard.

In  December  2004, the FASB issued SFAS No. 153,  "Exchanges  of
Nonmonetary  Assets - an amendment of APB Opinion No.  29".  SFAS
No.  153  amends  Accounting Principles Board  (APB)  Opinion  29
concerning  the  accounting for exchanges of  similar  productive
assets. Such transactions should be accounted for at fair  value,
the  basic  principle  for nonmonetary transactions,  unless  the
exchange lacks commercial substance.  The effective date of  SFAS
No. 153 is for nonmonetary asset exchanges taking place in fiscal
years  beginning after December 16, 2004.  The Company will adopt
SFAS  No.  153 in fiscal 2006 and does not expect it  to  have  a
significant impact on the Company's financial statements.

In  December  2004, the FASB issued SFAS No. 123 (revised  2004),
"Share  Based  Payment". This statement replaces  SFAS  No.  123,
"Accounting  for  Stock-Based Compensation," and  supersedes  APB
Opinion 25, "Accounting for Stock Issued to Employees." SFAS  No.
123  (revised 2004) requires that the cost of share-based payment
transactions  (including those with employees and  non-employees)
be  recognized as compensation costs in the financial statements.
SFAS  No.  123 (revised 2004) applies to all share-based  payment
transactions  in which an entity acquires goods  or  services  by
issuing  (or  offering to issue) its shares,  share  options,  or
other equity instruments (except for those held by an ESOP) or by
incurring  liabilities in amounts based (even  in  part)  on  the
price of the entity's shares or other equity instruments, or that
require  (or  may  require) settlement  by  the  issuance  of  an
entity's  shares  or  other  equity instruments.  This  statement
applies  to  all  new  awards  granted  during  the  fiscal  year
beginning  after  June 15, 2005 and to previous awards  that  are
modified  or  cancelled after such date. We have  not  yet  fully
evaluated  the  effect  of SFAS No. 123  (revised  2004)  on  our
consolidated  financial statements and have  not  determined  the
method of adoption we will use to implement SFAS No. 123 (revised
2004).

In  December 2004, the FASB issued FSP FAS 109-1, "Application of
FASB Statement No. 109, "Accounting for Income Taxes," to the Tax
Deduction  on  Qualified Production Activities  Provided  by  the
American Jobs Creation Act of 2004 (AJCA)." The AJCA introduces a
special 9% tax deduction on qualified production activities.  FSP
FAS  109-1  clarifies that this tax deduction should be accounted
for  as a special tax deduction in accordance with Statement 109.
Based upon the Company's preliminary evaluation of the effects of
this  guidance, we do not believe that it will have a significant
impact on the Company's financial statements.

                               23
<PAGE>

In  December 2004, the FASB issued FSP FAS 109-2, "Accounting and
Disclosure   Guidance   for  the  Foreign  Earnings  Repatriation
Provision  within  the  American Jobs Creations Act of 2004." The
AJCA  introduces  a limited time 85% dividends received deduction
on  the  repatriation  of  certain  foreign  earnings  to  a U.S.
taxpayer (repatriation  provision), provided certain criteria are
met.  FSP  FAS  109-2 provides accounting and disclosure guidance
for   the   repatriation  provision.  Based  upon  the  Company's
preliminary   evaluation  of  the  effects  of  the  repatriation
provision,  we do not believe that it will have any impact on the
Company's financial statements.

During  March  2005,  the Securities Exchange  Commission  issued
Staff Accounting Bulletin (SAB) No. 107, guidance on SFAS No. 123
(revised  2004).  SAB No. 107 was issued to assist  preparers  by
simplifying some to the implementation challenges of SFAS No  123
(revised  2004)  while enhancing the information  that  investors
receive. The Company will consider the guidance provided  by  SAB
No.  107  as  it  implements SFAS No. 123 (revised  2004)  during
fiscal 2006.

Results of Operations - Consolidated
2005 as compared to 2004

Net  sales  in  2005  increased approximately  $105,993,000  from
$259,360,000  to  $365,353,000, or 35.6%.   The  acquisitions  of
Crabar/GBF  on  June  30, 2004, Royal on  November  2,  2004  and
Alstyle on November 19, 2004 accounted for substantially  all  of
the   increase  in  net  sales.   Crabar/GBF,  Inc.   contributed
$41,226,000;  Royal Business Forms, Inc. contributed  $3,634,000;
and  Alstyle  contributed $56,045,000 to sales for  fiscal  2005.
The   Forms   Solutions  and  Financial  Groups,  excluding   the
acquisitions, experienced declines in net sales of 0.6% and 1.0%,
respectively.   The decreases were the result of industry  volume
shrinkage,  offset  by  moderate price  increases  instituted  to
offset  material cost increases.  Based upon industry  forecasts,
revenue  in these segments is declining at rates of between  2.0%
and   5.0%.    The   Promotional   Solutions   Group,   excluding
acquisitions,  increased 3.5% as a result  of  additional  volume
from  new customers.  Going forward into fiscal 2006, quarter-to-
quarter revenues will fluctuate more than historical "experience"
due   to  the  cyclicality  of  the  Alstyle  business.   Alstyle
typically experiences its highest revenues in the Company's first
fiscal quarter, with revenues experiencing declines in the second
and  third fiscal quarter and finally reaching a low point in the
fourth quarter. Since the products sold are activewear, it  would
be logical to see greater volume in the spring and summer seasons
with  declines  occurring in the fall and  winter  seasons.   The
Crabar/GBF,  Inc.  and  Royal  Business  Forms,  Inc.  operations
experience  revenue  cycles similar to the Company's  traditional
operations.

Gross  margins  decreased on a consolidated basis from  26.4%  to
24.8%  on a year-to-year basis due to the lower margins generated
by   the   sales  of  the  acquired  companies.   Excluding   the
acquisitions, gross margins for the combined operating  units  as
constituted at the beginning of the fiscal year were unchanged at
26.4%.   The  Company was able to maintain these  margins  during
fiscal year 2005 even though it experienced the first significant
raw  material  price increase in a number of  years.   The  price
increase  was approximately 5% on a blended basis and was  offset
by  cost  controls instituted by the Company during the year  and
sales  price  increases.  Crabar/GBF and Royal  both  experienced
lower   margins  than  typically  experienced  by  other  Company
operations  during the period they were part of the  consolidated
entity,   with   margins  of  approximately   17.7%   and   18.6%
respectively.  As part of the integration process, it is the goal
of the Company to improve the margins of these operations.  Gross
margin for Alstyle, at 21.3.%, was impacted in the current fiscal
year  as  result of the timing of the acquisition, which occurred
during  the  low  point of Alstyle's annual  cycle  of  business.
Additionally,  normal gross margins were affected in  the  fourth
quarter  because  of certain purchase accounting  adjustments  to
Alstyle's finished goods inventories.  These adjustments  reduced
our  fourth  quarter  normal gross margins by approximately  $1.1
million (pre-tax).In fiscal 2006, quarter-to-quarter gross margin
will  fluctuate as a result of the cyclical nature of the Alstyle
operations.

                               24
<PAGE>

Selling,  general  and  administrative  expense  increased  32.8%
during  fiscal 2005, from $38,521,000 to $51,159,000, as compared
to a  modest 2.6% growth from 2003 to 2004.  The increase was the
result  of  additional  expenses  added  by  the  acquisitions of
Crabar/GBF,  Royal  and  Alstyle  and  to  the $1,500,000 expense
incurred  for  compliance  with  the  Sarbanes-Oxley Act of 2002.
Selling, general  and administrative expenses as a percent of net
sales  excluding  the  acquisitions and Sarbanes-Oxley costs were
the same in both fiscal years 2005 and 2004 at 14.9%.

Interest expense increased from $830,000 to $2,755,000 in  fiscal
2005.  The increase is the result of the additional debt incurred
in  conjunction with the Crabar/GBF acquisition and  the  Alstyle
merger.   Because of this increase in debt, interest expense  for
fiscal 2006 will increase significantly.

Other  income increased in fiscal 2005, primarily as a result  of
gains from sales of equipment in conjunction with the closing  of
the Connolly Tool & Machine Co. during the year.

The  Company's  effective  federal  and  state  income  tax  rate
increased  from 37.9% to 38.7% in fiscal 2005.  The increase  was
the  result of increased state income taxes from the acquisitions
of Crabar/GBF, Inc. and Alstyle.

Results of Operations - Printing Segment

The  Printing Segment is comprised of the three groups listed  in
previous  years:  Forms  Solutions,  Promotional  Solutions,  and
Financial Solutions Groups.

The  Forms  Group grew from $142,006,000 in sales in fiscal  year
2004  to $177,618,000 in fiscal year 2005, an increase of  25.1%.
All  of this growth came from the acquisitions of Crabar/GBF  and
Royal.  Internal growth in forms sales actually declined by  0.6%
for  the  fiscal  year 2005.  The Forms Group earned  $25,761,000
before  tax for fiscal year 2005, an increase of 18.0%  over  the
$21,830,000  pre-tax  earnings recorded  for  fiscal  year  2004.
Gross  margins  declined from 27.1% in fiscal 2004  to  24.3%  in
fiscal  2005 due to the increased amount of longer run production
generated  in  the Crabar/GBF facilities.  Longer run  production
generally  creates  more material usage and  lower  margins  than
short run production.

The  Promotional Group grew from $67,024,000 in sales  in  fiscal
year  2004 to $83,881,000 in fiscal year 2005, a growth of 25.2%.
Most  of  this  growth came from the inclusion of  the  Cerritos,
California  plant  (a  Crabar/GBF  facility)  as  part   of   the
Promotional Group.  Additional growth occurred internally through
the  addition  of  some  large  accounts  during  the  year.  The
Promotional  Groups  pre-tax earnings  grew  from  $7,433,000  in
fiscal year 2004 to $11,168,000 in fiscal year 2005, a growth  of
50.2%.   More impressively was the profit as a percent of  sales,
11.6%  in  2004 compared to 13.3% in 2005.  This improvement  was
due  to  cost controls as well as growth in sales volume.   Gross
margins  had  a slight improvement from 23.5% in fiscal  2004  to
23.8% in fiscal 2005.

Sales in the Financial Group declined in 2005 from $50,330,000 in
sales  in fiscal 2004 to $47,809,000.  This decline was primarily
the  result  of  losing  some of our  large  customers  from  the
Northstar  brand as well as continued declines in our  GFS  brand
customer base.  Profitability, however, increased from $6,876,000
or 13.7% of sales for fiscal year 2004, to $7,346,000 or 15.4% of
sales  for fiscal year 2005.  This increase in profitability  was
largely   due  to  cost  controls  within  the  group.   Material
increases were largely passed through to the customers so margins
were slightly higher than in 2004 increasing from 27.8% in fiscal
2004 to 28.0% in fiscal 2005.  Since the acquisition in 1999, the
Financial  Group  has generated sufficient after-tax  profits  to
return the original investment made by the Company.

                               25
<PAGE>

Results of Operations - Apparel Segment

Net  sales in the Alstyle segment were $56,045,000 since the date
of  acquisition, November 19, 2004.  Approximately 86.0% of these
net  sales were driven by our top 10 styles, dominated by  our  6
ounce  weight and 5.5 ounce basic cotton t-shirts.  We anticipate
these  top ten styles will continue to account for a majority  of
our  sales  into  the  foreseeable future.  Alstyle's  sales  are
primarily  to retailers, screen printers, embellishers  and  mass
marketers.  While the fourth quarter is traditionally a  seasonal
low  sales  period  for  Alstyle and its competitors,  net  sales
benefited    from    several   significant   retail    customers.
Approximately 30.0% of our net sales were to the top 10 customers
during  this period, with 3 customers representing 15.0%  of  net
sales for the period.  We anticipate that this concentration will
moderate  lower  to historical levels of 10.0 to 20.0%  over  the
balance of fiscal year 2006.

Segment gross margin was 21.3% for the period ended February  28,
2005.   Gross  margin is generally impacted by the  cost  of  raw
materials  -  cotton yarn, manufacturing productivity,  costs  of
distribution  and realized "average selling price" ("ASP").   The
segment  results reflect the benefit of a negotiated fixed  price
commitment   with  our  major  yarn  suppliers  and  productivity
benefits  from  previous  capital  equipment  and  near  capacity
utilization.   In  addition, while  our  top  2  styles  -  which
accounted  for  50  percent of our net  sales  in  the  period  -
experienced modest growth in ASP compared to the same time period
a  year  ago, the overall ASP for our top 10 styles was  slightly
lower  than  the  prior  year  corresponding  period.   This  was
substantially due to style mix and competitive pressure on price.
We  anticipate  stable  raw  material pricing  and  availability,
sufficient   manufacturing  capacity  to  meet   expected   sales
requirements and stable market prices for our products.

Additional benefits to our gross margin are expected to occur due
to  an  investment  in  more  efficient  equipment  by  Alstyle's
previous  owners prior to the merger.  Alstyle had  spent  almost
$10,000,000 on new equipment prior to the merger that is expected
to improve the throughput of product in the manufacturing process
and reduce the cost to produce our products.

Additionally, Alstyle's normal gross margins were impacted in the
fourth quarter because of certain purchase accounting adjustments
to  Alstyle's  finished  goods  inventories.   These  adjustments
reduced  our fourth quarter normal gross margins by approximately
$1.1 million (pre-tax).  Excluding the effect of this adjustment,
gross margin would have been 23.3% during the period.

The  apparel segment selling, general and administrative expenses
were  approximately  $6,000,000 during the fourth  quarter  ended
February  28,  2005, or approximately 12.1%  of  net  sales,  and
consist  primarily of administrative and sales  personnel  wages,
commissions, marketing, advertising and professional fees.  These
expenses are expected to be consistent throughout the year and we
do not expect significant changes in fiscal 2006 from the current
level.

The  apparel segment pre-tax operating margin was 6.4% during the
period.   Excluding  the  effect of the  Statement  of  Financial
Accounting  Standards No. 141 "Business Combinations"  (SFAS  No.
141) adjustment above, operating margin would have been 8.2%.

2004 as compared to 2003

Printing Segment Only

Net  sales  in  2004 increased 7.7% from 2003. The  increase  was
attributable to the inclusion of revenue for the full fiscal year
ended  2004  from  the Company's acquisition of Calibrated  Forms
Co., Inc, (Calibrated), Calibrated was acquired in November

                               26
<PAGE>

2002 to augment the Forms Solutions Group.  This group, excluding
Calibrated, continued to be impacted by both the general  economy
and industry declines and accordingly had a decrease in sales  of
2.4%.   The Financial Solutions Group sales experienced a  slight
decrease  of 0.3%.  The Promotional Solutions Group continued  to
experience  the  negative  impact  of  the  general  economy  and
business declines and had a decrease in sales of 1.6%.

Gross  profit  margin increased to 26.4% in 2004 as  compared  to
26.3%  in  2003.  The Forms Solutions Group gross  profit  margin
decreased from 28.0% in fiscal 2003 to 26.6% in fiscal 2004.  The
gross  profit  margin of the Financial Solutions  Group  and  the
Promotional Solutions Group both increased from 26.6%  and  21.9%
in  fiscal 2003 to 27.8% and 23.1%, respectively, in fiscal 2004.
The  general weakness in the economy and the decline in the forms
industry  contributed  to lower prices  in  the  Forms  Solutions
Group.  In addition, the gross profit margin decreased due  to  a
combination  of  lower  fixed  cost  absorption  resulting   from
decreased sales volumes in certain plants and a shift in  mix  to
lower  margin  products.  The Financial Solutions Group  and  the
Promotional Solutions Group both experienced increases in  profit
margin  due  to  more  efficient fixed  cost  absorption  and  an
increase in the volume of profitable sales.

Selling, general and administrative expense increased 2.6% during
fiscal  2004 as compared to 2003.  The Financial Solutions  Group
and the Promotional Solutions Group accounted for a 2.4% and 2.0%
decrease   in  selling,  general  and  administrative   expenses,
respectively.   Effective cost reduction programs implemented  in
the  groups  accounted for the reduction.   The  Forms  Solutions
Group  and corporate selling, general and administrative expenses
increased 4.4% and 2.6% respectively.  The increase in the  Forms
Solutions  Group is primarily due to the inclusion of  Calibrated
for  the  full fiscal year ended 2004.  The increase in corporate
expense  is  primarily due to the centralization, on a  corporate
level,  of the administrative and accounting functions of  recent
acquisitions.

Investment income decreased 82.6% in 2004 as compared to 2003 due
to  declines in interest rates.  Interest expense decreased  from
$1,306,000 in fiscal 2003 to $830,000 in fiscal 2004 as a  result
of  the reduction in long-term financial debt and the declines in
interest rates.  Other expenses were flat in 2004 as compared  to
2003.

The  Company's  effective  federal  and  state  income  tax  rate
remained relatively constant from 2003 to 2004, increasing 0.5%.

Critical Accounting Policies and Judgments

In  preparing  our  consolidated  financial  statements,  we  are
required  to  make  estimates  and assumptions  that  affect  the
disclosures and reported amounts of assets and liabilities at the
date  of  the consolidated financial statements and the  reported
amounts of revenues and expenses during the reporting period.  We
evaluate  our  estimates  and  judgments  on  an  ongoing  basis,
including  those  related  to allowance  for  doubtful  accounts,
inventory  valuations, property, plant and equipment,  intangible
assets,  accrued  liabilities and  income  taxes.   We  base  our
estimates  and judgments on historical experience and on  various
other  factors  that  we  believe  to  be  reasonable  under  the
circumstances.  Actual results may differ materially  from  these
estimates under different assumptions or conditions.  The Company
believes  the following accounting policies are the most critical
due  to  their affect on the Company's more significant estimates
and  judgments used in preparation of its consolidated  financial
statements.

The   Company  maintains  a  defined-benefit  pension  plan   for
employees.   Included in our financial results are pension  costs
that  are  measured  using actuarial valuations.   The  actuarial
assumptions used may differ from actual results.

Intangibles  generated  through  acquisitions  are   based   upon
independent  appraisals of their values and are either  amortized
over  their useful life, or evaluated periodically (at least once
a  year)  to  determine whether the value has  been  impaired  by
events occurring during the fiscal year.

                               27
<PAGE>

We  exercise  judgment  in evaluating our long-lived  assets  for
impairment.   The Company assesses the impairment  of  long-lived
assets that include other intangible assets, goodwill, and  plant
and   equipment  annually  or  whenever  events  or  changes   in
circumstances  indicate  that  the  carrying  value  may  not  be
recoverable.  In performing tests of impairment, the Company must
make  assumptions regarding the estimated future cash  flows  and
other  factors  to  determine the fair value  of  the  respective
assets in assessing the recoverability of its goodwill and  other
intangibles.   If  these  estimates or  the  related  assumptions
change,  the Company may be required to record impairment charges
for these assets in the future.  Actual results could differ from
assumptions  made by management.  We believe our businesses  will
generate  sufficient undiscounted cash flow to more than  recover
the investments we have made in property, plant and equipment, as
well  as the goodwill and other intangibles recorded as a  result
of  our  acquisitions.  The Company cannot predict the occurrence
of future impairment triggering events nor the impact such events
might have on its reported asset values.

Revenue  is generally recognized upon shipment of products.   Net
sales  represents gross sales invoiced to customers, less certain
related   charges,   including  discounts,  returns   and   other
allowances.    Returns,  discounts  and  other  allowances   have
historically been insignificant.  In some cases and upon customer
request,  the Company prints and stores custom print product  for
customer specified future delivery, generally within six  months.
In  this  case, risk of loss passes to the customer, the customer
is  invoiced under normal credit terms and revenue is  recognized
when  manufacturing  is complete.  Approximately  $13,945,000  of
revenue was recognized under these agreements during fiscal 2005.
There were no significant sales in foreign countries.

Derivative  instruments are recognized on the  balance  sheet  at
fair  value. Changes in fair values of derivatives are  accounted
for based upon their intended use and designation.  The Company's
interest rate swap is held for purposes other than trading.   The
Company  utilized  swap  agreements  related  to  its  term   and
revolving  loans  to  effectively fix the  interest  rate  for  a
specified  principal  amount of the loans.   The  swap  has  been
designated as a cash flow hedge, and the after tax effect of  the
mark-to-market valuation that relates to the effective amount  of
derivative  financial instrument is recorded as an adjustment  to
accumulated  other comprehensive income with the offset  included
in accrued expenses.

As  part  of the process of preparing our consolidated  financial
statements, we are required to estimate our income taxes in  each
jurisdiction   in  which  we  operate.   This  process   involves
estimating   our  actual  current  tax  exposure  together   with
assessing   temporary   differences  resulting   from   different
treatment  of  items  for  tax  and accounting  purposes.   These
differences result in deferred tax assets and liabilities,  which
are  included  in our consolidated balance sheet.  We  must  then
assess  the  likelihood  that our deferred  tax  assets  will  be
recovered from future taxable income and to the extent we believe
that  recovery  is  not  likely, we must  establish  a  valuation
allowance.  To the extent we establish a valuation allowance,  we
must  include  an  expense  within  the  tax  provision  in   the
consolidated  statements of income.  In  the  event  that  actual
results  differ  from these estimates, our provision  for  income
taxes could be materially impacted.

In  view of such uncertainties, investors should not place  undue
reliance  on our forward-looking statements since such statements
speak  only as of the date when made.  We undertake no obligation
to  publicly  update  or  revise any forward-looking  statements,
whether  as  a  result  of  new  information,  future  events  or
otherwise.

                               28
<PAGE>

Management's  letter  to  shareholders, operations  overview  and
discussion, and analysis of results of operations contain forward-
looking  statements that reflect the Company's current view  with
respect  to  future revenues and earnings.  These statements  are
subject to numerous uncertainties, including (but not limited to)
the  rate  at  which  the traditional business  forms  market  is
contracting,  the application of technology to the production  of
business forms, demand for the Company's products in the  context
of the contracting market, variability in the prices of paper and
other  raw materials, and competitive conditions in the  business
forms  market.   Because  of  such  uncertainties,  readers   are
cautioned  not  to  place undue reliance on such  forward-looking
statements which speak only as of May 16, 2005.

                               29
<PAGE>
<TABLE>
<CAPTION>
Ten-Year Financial Review
(In thousands, except per share amounts)
Fiscal years ended            2005     2004     2003     2002
                              ----     ----     ----     ----
<S>                         <C>       <C>       <C>      <C>

Net sales                   $365,353  $259,360  $240,757 $236,923

Earnings before income
  taxes                       37,465    28,890    24,345   24,403

Provision for income taxes    14,506    10,939     9,098    9,437

Net earnings                  22,959    17,951    15,247   14,966

      As a % of sales           6.3%      6.9%      6.3%     6.3%

      Per common share -
        diluted                $1.19     $1.08     $0.93    $0.92

Dividends                     11,574    10,146    10,093   10,089

        Per share                .62       .62       .62      .62

Shareholders' equity         271,731   110,582    96,903   96,035

        Per share - basic      14.33      6.76      5.95     5.89

Current assets               149,173    63,605    65,012   62,646

Current liabilities           81,383    25,400    25,294   23,966

Net working capital           67,790    38,205    39,718   38,680

 Ratio of current assets to
     current liabilities       1.8:1     2.5:1     2.6:1    2.6:1

 Depreciation of plant and
     equipment                10,367     9,216     9,156    8,683

 Additions to property,
     plant and equipment       6,143     4,543     3,763    2,254

 </TABLE>
                               30
 <PAGE>

 <TABLE>
 <CAPTION>
 Ten-Year Financial Review
 (In thousands, except per share amounts)
    2001        2000      1999       1998      1997      1996
    ----        ----      ----       ----      ----      ----
  <C>         <C>       <C>        <C>       <C>       <C>

  $229,186    $176,600  $159,690   $162,962  $161,969  $150,071


    21,571      24,041    22,558     15,805    21,485    30,104

     8,394       8,918     8,448      5,597     7,992    11,487

    13,177      15,123    14,110     10,208    13,493    18,617

      5.7%        8.6%      8.8%       6.3%      8.3%     12.4%


     $0.81       $0.93     $0.87      $0.62     $0.82     $1.13

    10,075      10,068    10,116     10,191    10,110     9,782

       .62         .62       .62        .62      .615      .595

    91,540      88,267    83,499     81,672    81,586    78,195

      5.63        5.45      5.12       4.97      4.96      4.76

    58,263      43,305    52,676     53,660    52,627    67,544

    17,908      10,525     8,367     10,396    10,307    13,054

    40,355      32,780    44,309     43,264    42,320    54,490


     3.3:1       4.1:1     6.3:1      5.2:1     5.1:1     5.2:1

     8,313       5,389     4,941      5,634     4,475     3,553


      3,594      2,988     3,663      9,576    13,575     6,106

</TABLE>
                              31
 <PAGE>
 Consolidated
 Statements of
 Earnings
 (In thousands, except
 share and per share
 amounts)
 <TABLE>
 <CAPTION>
                                             Fiscal Years Ended
                                         2005       2004       2003
                                         ----       ----       ----

  <S>                                <C>        <C>         <C>
  Net sales                          $365,353   $259,360    $240,757
  Costs and expenses:
    Cost of sales                     274,596    190,812     177,485
    Selling, general and
      administrative expenses          51,159     38,521      37,559
                                      -------    -------     -------
                                      325,755    229,333     215,044
                                      -------    -------     -------
        Earnings from operations       39,598     30,027      25,713
                                      -------    -------     -------
  Other income (expense):
    Investment income                     246         29         167
    Interest expense                   (2,755)      (830)     (1,306)
    Other                                 376       (336)       (229)
                                      -------    -------     -------

                                       (2,133)    (1,137)     (1,368)
                                      -------    -------     -------
        Earnings before income taxes   37,465     28,890      24,345
  Provision for income taxes           14,506     10,939       9,098
                                      -------    -------     -------
        Net earnings                 $ 22,959   $ 17,951    $ 15,247
                                      =======    =======     =======

  Net earnings per share of common
    stock - basic                    $   1.21   $   1.10    $    .94
                                      =======    =======     =======
  Net earnings per share of common
    stock - diluted                  $   1.19   $   1.08    $    .93
                                      =======    =======     =======

  Weighted average number of
    common shares outstanding -
    basic                          18,935,533 16,358,107  16,284,575
  Weighted average number of
    common shares outstanding -
    diluted                        19,259,550 16,601,838  16,478,140

 </TABLE>

 See accompanying notes to consolidated financial statements.

                               32
 <PAGE>

 Consolidated
 Statements of Cash
 Flows
 (In thousands)
 <TABLE>
 <CAPTION>
                                               Fiscal Years Ended
                                            2005       2004      2003
                                            ----       ----      ----
  <S>                                      <C>        <C>       <C>
  Cash flows from operating activities:
    Net earnings                          $ 22,959   $ 17,951  $ 15,247
    Adjustments to reconcile net
     earnings
     to net cash provided by operating
     activities:
      Depreciation                          10,367      9,216     9,156
      Amortization                             709        132        38
      Gain on the sale of equipment           (316)       (65)      (93)
      Bad debt expense                         893        890       941
      Changes in operating assets and
       liabilities:
        Receivables                         (2,922)     1,387      (989)
        Prepaid expenses                    (1,315)      (314)      (98)
        Inventories                         (3,958)      (617)      (42)
        Contract costs in excess of
         billing                                --        875      (711)
        Other current assets                (2,084)       314      (452)
        Accounts payable and accrued
         expenses                           (6,640)     1,017      (578)
        Other assets and liabilities         2,349     (4,537)      197
        Foreign exchange gain                    4         --        --
                                           -------    -------   -------
         Net cash provided by operating
          activities                        20,046     26,249    22,616
                                           -------    -------   -------

  Cash flows from investing activities:
    Acquisition of businesses (net of
     cash acquired)                       (115,429)        --   (20,522)
    Capital expenditures                    (6,143)    (4,543)   (3,763)
    Proceeds from disposal of property         481        176       176
    Redemption of investments                   --         --     1,802
    Other                                       --       (179)      (38)
                                           -------    -------   -------
         Net cash used in investing
          activities                      (121,091)    (4,546)  (22,345)
                                           -------    -------   -------

  Cash flows from financing activities:
    Debt issued to finance acquisitions    114,200         --    15,000
    Repayment of debt issued to finance
     acquisitions                           (6,375)   (11,038)   (7,540)
    Dividends                              (11,574)   (10,146)  (10,093)
    Purchase of treasury stock                  (2)        (7)      (55)
    Proceeds from exercise of stock
     options                                   423        695       593
    Other                                       --         --      (496)
                                           -------    -------   -------
         Net cash provided by (used in)
          financing activities              96,672    (20,496)   (2,591)
                                           -------    -------   -------

  Net change in cash and cash               (4,373)     1,207    (2,320)
   equivalents
  Cash and cash equivalents at beginning
   of year                                  15,067     13,860    16,180
                                           -------    -------   -------

  Cash and cash equivalents at end of
  year                                    $ 10,694   $ 15,067  $ 13,860
                                           =======    =======   =======
 </TABLE>

 Non-cash    activities and  cash used to  pay taxes   and   interest
 are  included  in  the accompanying notes  to consolidated
 financial statements.

 See accompanying notes to consolidated financial statements.
                               33
 <PAGE>


 Consolidated Balance Sheets
 (In thousands, except share and par value amounts)
 <TABLE>
 <CAPTION>
                                                 Fiscal Years Ended
                                                 2005          2004
                                                 ----          ----
  <S>                                         <C>          <C>
  Assets
  Current assets:
    Cash and cash equivalents                 $10,694      $ 15,067
    Receivables, principally trade, less
      allowance for doubtful receivables of
      $3,567 in 2005 and $1,771 in 2004        46,685        29,800
    Prepaid expenses                            5,162         2,022
    Inventories                                79,900        13,721
    Other current assets                        6,732         2,995
                                              -------       -------

         Total current assets                 149,173        63,605
                                              -------       -------

  Property, plant and equipment, at cost:
    Plant, machinery and equipment            114,053        96,423
    Land and buildings                         38,846        28,362
    Other                                      19,521        16,811
                                              -------       -------
                                              172,420       141,596
    Less accumulated depreciation             100,401        95,116
                                              -------       -------

         Net property, plant and equipment     72,019        46,480
                                              -------       -------

  Goodwill                                    178,472        34,420

  Trademarks                                   62,090         1,154

  Purchased customer list                      23,275            --

  Other assets                                 12,217         8,384
                                              -------       -------

                                             $497,246      $154,043
                                              -------       -------
 </TABLE>
                               34
 <PAGE>



 Consolidated Balance Sheets
 (In thousands, except share and par value amounts)

                                               Fiscal Years Ended
                                                2005       2004
                                                ----       ----

  Liabilities and Shareholders' Equity
  Current liabilities:
    Accounts payable                          $ 33,887   $  5,804
    Accrued expenses:
      Employee compensation and benefits        16,135      7,908
      Taxes other than income                    3,154      1,427
      Federal and state income taxes payable     1,389         --
      Other                                      5,116      3,926
    Current installments of long-term debt      21,702      6,335
                                               -------    -------
         Total current liabilities              81,383     25,400
                                               -------    -------

  Long-term debt, less current installments    112,342      7,800
  Deferred credits, principally income taxes    31,790     10,261

  Commitments and contingencies                     --         --

  Shareholders' equity:
    Series A junior participating preferred
    stock of $10 par value.
      Authorized 1,000,000 shares; none
      issued                                        --         --
    Common stock of $2.50 par value.
      Authorized 40,000,000 shares; issued
      30,053,443 shares
        in 2005 and 21,249,860 shares in 2004   75,134     53,125
    Additional paid in capital                 123,640        126
    Retained earnings                          156,666    145,653
    Accumulated other comprehensive income
    (loss):
      Foreign currency translation                   5         --
      Unrealized gain (loss) on derivative
      instruments, net of
        deferred taxes of $0 and $70                 1       (114)
                                               -------    -------
          Total accumulated other
            comprehensive income (loss)              6       (114)
                                               -------    -------

                                               355,446    198,790

    Treasury stock, 4,635,444 and 4,856,626
    shares, respectively                        83,715     88,208
                                               -------    -------

         Total shareholders' equity            271,731    110,582
                                               -------    -------

                                              $497,246   $154,043
                                               =======    =======

 See accompanying notes to consolidated financial statements.
                               35
 <PAGE>

Consolidated Statement of Changes in Shareholders' Equity
(In thousands, except share amounts):

<TABLE>
<CAPTION>
                                                       Accumulated
                   Common Stock     Additional             Other        Treasury Stock
                   ------------      Paid-in   Retained Comprehensive     --------------
                  Shares   Amount    Capital   Earnings  Income (Loss)     Shares    Amount Total
                   ------   ------    -------   ------- -----------    ------     ------   -----
                                                  -         --
<S>              <C>       <C>      <C>        <C>     <C>          <C>         <C>       <C>
Balance
 February 28,
 2002         21,249,860   $53,125   $1,040   $132,694 $  (401)    (4,976,922) $(90,423) $96,035
  Net earnings        --        --       --     15,247      --             --        --   15,247
  Unrealized
   gain on
   derivative
   instruments                                             158                               158
  Minimum
   pension
   liability,
   net of tax
   effect                                               (4,982)                           (4,982)
                                                                                          ------
  Comprehensive
   income                                                                                 10,423
  Dividends
   declared
   ($.62 per
   share)            --         --       --    (10,093)    --
    --        --   (10,093)
  Treasury
   stock issued      --         --     (579)        --     --         64,500     1,172       593
  Treasury
   stock
   purchases         --         --       --         --     --         (4,465)      (55)      (55)
              ---------     ------  -------    ------- -------     ----------    ------  -------

Balance
 February 28,
 2003         21,249,860    53,125      461    137,848  (5,225)    (4,916,887)  (89,306)  96,903
  Net
   earnings          --         --       --     17,951      --            --        --    17,951
  Unrealized
   gain on
   derivative
   instruments                                             129                               129
  Minimum
   pension
   liability,
   net of tax
   effect                                                4,982                             4,982
                                                                                         -------
  Comprehensive
   income                                                                                 23,062
  Dividends
   declared
   ($.62 per          --        --       --    (10,146)     --             --        --  (10,146)
   share)
  Treasury
   stock issued       --        --     (410)        --      --         60,825     1,105      695
  Treasury
   stock
   purchases          --        --       --         --      --           (564)       (7)      (7)
  Other               --        --       75         --      --             --        --       75
               ---------    ------  -------    ------- -------      ---------   -------  -------
Balance
 February 29,
  2004        21,249,860     53,125     126    145,653    (114)    (4,856,626)  (88,208) 110,582
  Net earnings        --        --       --    22,959       --             --        --   22,959
  Foreign
   currency
   translation        --        --       --        --       5             --        --        5
  Unrealized
   gain on
   derivative
   instruments                                             115                               115
                                                                                         -------
  Comprehensive
   income                                                                                 23,079
  Dividends
   declared
   ($.62 per          --        --      --     (11,574)     --             --        --  (11,574)
   share)
  Shares
   issued in
   acquisi-
   tions       8,803,583    22,009 123,514          --      --        177,458     3,700  149,223
  Treasury
   stock issued       --        --      --        (372)     --         43,850       795      423
  Treasury
   stock
   purchases          --        --      --          --      --           (126)       (2)      (2)
               ---------    ------ -------     ------- -------      ---------   -------  -------
Balance
 February 28, 30,053,443   $75,134 $123,640   $156,666 $     6     (4,635,444) $(83,715)$271,731
 2005         ==========    ======  =======    ======= =======      =========    ======  =======
</TABLE>
See accompanying notes to consolidated financial statements.
                                       36
<PAGE>
Notes to Consolidated Financial Statements

(1)  Significant Accounting Policies and General Matters

Nature   of  Operations.   Ennis,  Inc.  and  its  wholly   owned
subsidiaries  (the  Company)  is  principally  engaged   in   the
production of and sale of business forms, other business products
and apparel to customers primarily located in the United States.

Basis  of  Consolidation.  The consolidated financial  statements
include  the  accounts  of  the  Company  and  its  wholly  owned
subsidiaries.    All   significant  intercompany   accounts   and
transactions  have been eliminated.  Certain accounts  have  been
reclassified to present comparable results.  The Company's fiscal
years  ended on the following days:  February 28, 2005,  February
29, 2004 and February 28, 2003 (fiscal years ended 2005, 2004 and
2003, respectively).

Cash and Cash Equivalents.  The Company invests cash in excess of
daily  operating  requirements in income  producing  investments.
All  such investments (consisting of Eurodollar deposits of  U.S.
banks)  have  an  original maturity of 90 days or  less  and  are
considered to be cash equivalents.

Receivable   and   Notes  Receivable.   Trade   receivables   are
uncollateralized  customer obligations  due  under  normal  trade
terms requiring payment generally within 30 days from the invoice
date.  The  Company's  estimate of  the  allowance  for  doubtful
accounts for trade receivables is primarily determined based upon
the  length  of  time  that  the receivables  are  past  due.  In
addition,  management  estimates are used to  determine  probable
losses  based  upon  an analysis of prior collection  experience,
specific account risks and economic conditions.

The  Company initiates a series of actions that occur based  upon
the  aging  of  past  due trade receivables,  including  letters,
statements  and  direct  customer contact.  Accounts  are  deemed
uncollectible  based  on  past  account  experience  and  current
account  financial condition.  When it is determined  an  account
will not be collected it is written off.

Notes receivable are stated at the principal amount; interest  is
accrued  where  applicable. An allowance for uncollectible  notes
receivable  is recorded based upon management's determination  of
probable  losses  based  upon  an analysis  of  prior  collection
experience,  specific  account  risks  and  economic  conditions.
Select  trade  accounts receivable are sold  by  the  Company  to
various  factors on both non-recourse and recourse basis.   These
transactions  are  accounted for as a sale of  financial  assets.
Advances may be paid at the Company's request on receivables  not
yet collected by the factors.

Bad  debt expense was $893,000, $890,000 and $941,000 for  fiscal
years 2005, 2004, and 2003, respectively.

Inventories.  The Company values the raw material content of most
of its business forms inventories at the lower of last-in, first-
out  (LIFO) cost or market and all apparel inventory at the lower
of  first  in, first out (FIFO) cost or market.  At fiscal  years
ended  2005 and 2004, approximately 10% of inventories are valued
at  LIFO with the remainder of inventories valued at the lower of
FIFO  cost  or market.  The Company provides reserves for  excess
and obsolete inventory based upon analysis of quantities on hand,
recent sales volumes and reference to market prices.

Property,  Plant and Equipment.  Depreciation of property,  plant
and  equipment is provided by the straight-line method  at  rates
presently considered adequate to amortize the total cost over the
useful  lives of the assets, which range from 3 to 11  years  for
plant  machinery and equipment and 10 to 40 years  for  buildings
and improvements.  Leasehold improvements are

                               37
<PAGE>

amortized  over  the shorter of the lease term or  the  estimated
useful  life  of  the improvements.  Repairs and maintenance  are
expensed  as  incurred.  Renewals and betterments are capitalized
and  depreciated over the remaining life of the specific property
unit.  The Company capitalizes all leases, which are in substance
acquisitions of property.

Goodwill and Other Intangible Assets.  Goodwill is the excess  of
the  purchase  price  paid  over  the  value  of  net  assets  of
businesses acquired and is not amortized.  Intangible assets with
determinable  lives are amortized on a straight-line  basis  over
the   estimated   useful  life.   Goodwill  and  indefinite-lived
intangibles are evaluated for impairment on an annual  basis,  or
more  frequently if impairment indicators arise,  using  a  fair-
value-based test that compares the fair value of the asset to its
carrying value.

Long-Lived   Assets.  Long-lived  assets,  including   intangible
assets, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an  asset  may
not be recoverable.  Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of an asset to
future  undiscounted net cash flows expected to be  generated  by
the  asset.   If  such assets are considered to be impaired,  the
impairment  to be recognized is based upon future discounted  net
cash flows.

Approximately  $4,500,000  of the company's  plant  property  and
equipment are located in Mexico at fiscal year end 2005.   Assets
to  be  disposed  of are reported at the lower  of  the  carrying
amount or fair value less costs to sell.  Plant and equipment are
stated  at  cost less accumulated depreciation.  Costs of  normal
maintenance  and  repairs are charged to expense  when  incurred.
Upon   the   disposition  of  assets,  their  cost  and   related
depreciation are removed from the respective accounts.

Fair Value of Financial Instruments.  The carrying amount of cash
and   cash   equivalents,  receivables   and   accounts   payable
approximates  fair value because of the short maturity  of  these
instruments.   Long-term debt as of fiscal years ended  2005  and
2004  approximates  its  fair value.  The related  interest  rate
swaps were recorded at fair value at fiscal years ended 2005  and
2004.  See also Note 4.

Derivative  Financial  Instruments.  Derivative  instruments  are
recognized on the balance sheet at fair value.  Changes  in  fair
values of derivatives are accounted for based upon their intended
use  and  designation.  The Company's interest rate swap is  held
for  purposes  other  than trading.  The  Company  utilized  swap
agreements related to its term and revolving loans to effectively
fix  the  interest rate for a specified principal amount  of  the
loans.  The swap has been designated as a cash flow hedge and the
after-tax effect of the mark-to-market valuation that relates  to
the  effective  amount  of  derivative  financial  instrument  is
recorded  as  an  adjustment to accumulated  other  comprehensive
income with the offset included in accrued expenses.

Revenue  Recognition.   Revenue  is  generally  recognized   upon
shipment  of products.  Net sales represents gross sales invoiced
to  customers, less certain related charges, including discounts,
returns  and  other  allowances.  Returns,  discounts  and  other
allowances  have historically been insignificant.  In some  cases
and  upon customer request, the Company prints and stores  custom
print  product for customer specified future delivery,  generally
within  six  months.  In this case, risk of loss  passes  to  the
customer, the customer is invoiced under normal credit terms  and
revenue   is   recognized   when   manufacturing   is   complete.
Approximately $13,945,000 of revenue was recognized  under  these
agreements  during fiscal 2005.  There were no significant  sales
in foreign countries.

Advertising Expenses.  The Company expenses advertising costs  as
incurred.   Catalog and brochure preparation and printing  costs,
which  are  considered direct response advertising, are amortized
to expense over the life of the catalog, which typically

                               38
<PAGE>

ranges  from  three  to twelve months.  Advertising  expense  was
approximately $1,628,000, $1,434,000 and $1,528,000,  during  the
fiscal  years ended 2005, 2004 and 2003, respectively.   Included
in advertising expense is amortization related to direct response
advertising  of  $454,000, $537,000 and $474,000 for  the  fiscal
years  ended  2005,  2004  and 2003,  respectively.   Unamortized
direct  response  advertising costs  included  in  other  current
assets  at  fiscal  years ended 2005 and 2004 were  $208,000  and
$193,000, respectively.

Income Taxes.  Deferred tax assets and liabilities are recognized
for  the  estimated  future  tax  consequences  attributable   to
differences between the financial statement carrying  amounts  of
existing  assets and liabilities and their respective  tax  bases
and  operating loss and tax credit carry forwards.  Deferred  tax
assets  and  liabilities  are measured using  enacted  tax  rates
expected  to apply to taxable income in the years in which  those
temporary  differences are expected to be recovered  or  settled.
The effect on deferred tax assets and liabilities of a change  in
tax rates is recognized in income in the period that includes the
enactment date.

Credit  Risk.   The  Company's  financial  instruments  that  are
exposed to credit risk consist of its trade receivables and  cash
equivalents.  The trade receivables are geographically  dispersed
primarily within the continental United States. Credit losses are
provided  for in the financial statements.  One customer accounts
for 15.7% of accounts receivable at fiscal year end 2005.

Earnings  Per  Share.  Basic earnings per share  is  computed  by
dividing earnings by the weighted average number of common shares
outstanding  during the period.  Diluted earnings  per  share  is
computed  by dividing earnings by the weighted average number  of
common  shares  outstanding plus the number of additional  shares
that   would  have  been  outstanding  if  potentially   dilutive
securities  had been issued, calculated using the treasury  stock
method.   At fiscal years ended 2004 and 2003, 10,500 and  70,250
of  options,  respectively,  were not  included  in  the  diluted
earnings  per  share  computation because  their  exercise  price
exceeded  the  average fair market value for the Company's  stock
for the year.

Accumulated Other Comprehensive Income (Loss).  Accumulated other
comprehensive loss consists of the changes in the fair  value  of
the  Company's  cash flow hedge and foreign currency  translation
and  pension.   Amounts charged directly to shareholders'  equity
related to the Company's interest rate swap and pension plan  are
included in "other comprehensive income."   Adjustments resulting
from  the translation of the financial statements of our  Mexican
operations  are  charged  or credited  directly  to  shareholders
equity  and shown as cumulative translation adjustments in  other
comprehensive income (loss).

Estimates.  The preparation of financial statements in conformity
with  accounting  principles generally  accepted  in  the  United
States requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and
disclosure  of contingent assets and liabilities at the  date  of
the  financial statements and the reported amounts of revenue and
expenses  during  the  reporting period.   Actual  results  could
differ from these estimates.

Shipping  and  Handling Costs.  Amounts billed to  customers  for
shipping  and handling costs are included in revenue and  related
costs are included in cost of sales.

Stock Based Compensation.  The Company accounts for employee  and
director stock-based compensation arrangements in accordance with
the  provisions  of Accounting Principles Board Opinion  No.  25,
"Accounting  for  Stock Issued to Employees" (APB  No.  25),  and
related   interpretations,  and  complies  with  the   disclosure
provisions  of  Statement of Financial Accounting  Standards  No.
123, "Accounting for Stock-Based Compensation" (SFAS No. 123) and
Statement  of Financial Accounting Standards No. 148, "Accounting
for  Stock-Based Compensation - Transition and Disclosure"  (SFAS
No.  148).    Under  APB No. 25, compensation expense  for  fixed
awards is based upon the difference, if any, on the date of grant
between the estimated

                               39
<PAGE>

fair  value of the Company's stock and the exercise price and  is
amortized over the vesting period.  All stock-based awards to non-
employees,  if any, are accounted for at their fair  value.   The
Company  is required to disclose the pro forma net income  as  if
the fair value method defined in SFAS No. 123 had been applied.

The  following  table represents the effect  on  net  income  and
earnings  per share as if the Company had applied the fair  value
based method and recognition provisions of SFAS No. 123 to stock-
based  Employee  Compensation for  the  fiscal  years  ended  (in
thousands, except per share amounts):

                                     2005    2004     2003
                                     ----    ----     ----

   Net earnings, as reported      $22,959  $17,951  $15,247
   Deduct total stock-based
   employee
     compensation expense
     determined under fair
     value based methods for
     all awards, net of related
     tax effects                      (47)     (26)     (85)
                                   ------   ------   ------
   Pro forma net earnings         $22,912  $17,925  $15,162
                                   ======   ======   ======

  Earnings per share:
   As reported - basic             $1.21    $1.10    $.94
   Pro forma - basic               $1.21    $1.10    $.94
   As reported - diluted           $1.19    $1.08    $.93
   Pro forma - diluted             $1.19    $1.08    $.92


For  purposes of pro forma disclosures, the estimated fair  value
of  stock-based compensation plans and other options is amortized
to expense over the vesting period.

Recent  Accounting  Pronouncements.  In  July  2002,  the  Public
Company  Accounting Reform and Investor Protection  Act  of  2002
(the Sarbanes-Oxley Act) was enacted. Section 404 stipulates that
public  companies  must take responsibility  for  maintaining  an
effective  system of internal control.  The Act  requires  public
companies  to  report on the effectiveness of their control  over
financial  reporting  and  obtain  an  audit  report  from  their
independent   registered  public  accountant  about  management's
report.  The  Act requires certain public companies  (accelerated
filers)  to  report  on  the  company's  internal  control   over
financial  reporting for fiscal years ended on or after  November
15,  2004.  Other public companies (non-accelerated filers)  must
begin  to  comply with the new requirements related  to  internal
control  over  financial reporting for their  first  fiscal  year
ending  on  or  after July 15, 2006, under the  latest  extension
granted by the Securities and Exchange Commission.

In November 2004, the Financial Accounting Standards Board (FASB)
issued  Statement  of Financial Accounting Standards  (SFAS)  No.
151,  "Inventory Costs - an amendment of ARB No. 43, Chapter  4".
This  statement clarifies the accounting for abnormal amounts  of
idle facility expense, freight handling costs and wasted material
(spoilage). This statement requires that these types of costs  be
recognized  as current period charges. SFAS No. 151 is  effective
prospectively  for inventory costs incurred during  fiscal  years
beginning after June 15, 2005, with earlier application permitted
for  such  costs  incurred during fiscal  years  beginning  after
November  24, 2004.  Management does not expect the  adoption  of
SFAS  No.  151  to  have a significant impact  on  the  Company's
financial   statements  as  the  Company's  current   method   of
accounting for inventory costs are consistent with this standard.

                               40
<PAGE>

In  December  2004, the FASB issued SFAS No. 153,  "Exchanges  of
Nonmonetary  Assets - an amendment of APB Opinion No.  29".  SFAS
No.  153  amends  Accounting Principles Board  (APB)  Opinion  29
concerning  the  accounting for exchanges of  similar  productive
assets. Such transactions should be accounted for at fair  value,
the  basic  principle  for nonmonetary transactions,  unless  the
exchange lacks commercial substance.  The effective date of  SFAS
No. 153 is for nonmonetary asset exchanges taking place in fiscal
years  beginning after December 16, 2004.  The Company will adopt
SFAS  No.  153 in fiscal 2006 and does not expect it  to  have  a
significant impact on the Company's financial statements.

In  December  2004, the FASB issued SFAS No. 123 (revised  2004),
"Share  Based  Payment". This statement replaces  SFAS  No.  123,
"Accounting  for  Stock-Based Compensation," and  supersedes  APB
Opinion 25, "Accounting for Stock Issued to Employees." SFAS  No.
123  (revised 2004) requires that the cost of share-based payment
transactions  (including those with employees and  non-employees)
be  recognized as compensation costs in the financial statements.
SFAS  No.  123 (revised 2004) applies to all share-based  payment
transactions  in which an entity acquires goods  or  services  by
issuing  (or  offering to issue) its shares,  share  options,  or
other equity instruments (except for those held by an ESOP) or by
incurring  liabilities in amounts based (even  in  part)  on  the
price of the entity's shares or other equity instruments, or that
require  (or  may  require) settlement  by  the  issuance  of  an
entity's  shares  or  other  equity instruments.  This  statement
applies  to  all  new  awards  granted  during  the  fiscal  year
beginning  after  June 15, 2005 and to previous awards  that  are
modified  or  cancelled after such date. We have  not  yet  fully
evaluated  the  effect  of SFAS No. 123  (revised  2004)  on  our
consolidated  financial statements and have  not  determined  the
method of adoption we will use to implement SFAS No. 123 (revised
2004).

In  December 2004, the FASB issued FSP FAS 109-1, "Application of
FASB Statement No. 109, "Accounting for Income Taxes," to the Tax
Deduction  on  Qualified Production Activities  Provided  by  the
American Jobs Creation Act of 2004 (AJCA)." The AJCA introduces a
special 9% tax deduction on qualified production activities.  FSP
FAS  109-1  clarifies that this tax deduction should be accounted
for  as a special tax deduction in accordance with Statement 109.
Based upon the Company's preliminary evaluation of the effects of
this  guidance, we do not believe that it will have a significant
impact on the Company's financial statements.

In  December 2004, the FASB issued FSP FAS 109-2, "Accounting and
Disclosure   Guidance  for  the  Foreign  Earnings   Repatriation
Provision  within the American Jobs Creations Act of  2004."  The
AJCA  introduces a limited time 85% dividends received  deduction
on  the  repatriation  of  certain foreign  earnings  to  a  U.S.
taxpayer (repatriation provision), provided certain criteria  are
met.  FSP  FAS 109-2 provides accounting and disclosure  guidance
for   the   repatriation  provision.  Based  upon  the  Company's
preliminary   evaluation  of  the  effects  of  the  repatriation
provision, we do not believe that it will have any impact on  the
Company's financial statements.

During  March  2005,  the Securities Exchange  Commission  issued
Staff Accounting Bulletin (SAB) No. 107, guidance on SFAS No. 123
(revised  2004).  SAB No. 107 was issued to assist  preparers  by
simplifying some to the implementation challenges of SFAS No  123
(revised  2004)  while enhancing the information  that  investors
receive. The Company will consider the guidance provided  by  SAB
No.  107  as  it  implements SFAS No. 123 (revised  2004)  during
fiscal 2006.


(2)  Due From Factors

Pursuant to terms of an agreement between the Company and various
factors,  the  Company  sells a majority of  its  trade  accounts
receivable to the factors on a non-recourse basis.  The price  at
which the accounts are sold is the invoice amount reduced by  the
factor commission of between 0.25% and 0.50%.  Additionally, some
trade  accounts receivable are sold to the factors on a  recourse
basis.

                               41
<PAGE>

Trade  accounts receivable not sold to the factor remain  in  the
custody and control of the Company and the Company maintains  all
credit risk on those accounts as well as accounts which are  sold
to the factor with recourse.

The Company may request payment from the factor in advance of the
collection  date  or  maturity.  Any such  advance  payments  are
assessed  in  interest  charges through the  collection  date  or
maturity  at  the prime rate as published by The Chase  Manhattan
Bank.   The  Company's obligations with respect to advances  from
the  factor are limited to the interest charge thereon.   Advance
payments  are  limited to a maximum of 90%  (ninety  percent)  of
eligible accounts receivable.

At  February  28, 2005, included in receivables  in  the  balance
sheet  amounts,  due from factors consists of the  following  (in
thousands):

       Outstanding factored
       receivables
          Without recourse        $ 26,756
           With recourse             1,213
       Advances                    (24,675)
                                   -------
              Due from factors    $  3,294
                                   =======


(3)  Inventories

The  following table summarizes the components of inventories  at
the  different  stages of production at fiscal  years  ended  (in
thousands):

                                           2005        2004
                                           ----        ----
      Raw material                      $ 26,517    $  6,911
      Work-in-process                     17,669       1,393
      Finished goods                      34,893       5,417
                                          ------      ------
                                         $79,079     $13,721
                                          ------      ------

The  excess of current costs at FIFO over LIFO stated values  was
approximately  $4,166,000 and $3,761,000 at  fiscal  years  ended
2005  and 2004, respectively.  The Company provides reserves  for
excess  and  obsolete inventory based upon analysis of quantities
on  hand,  recent sales volumes and reference to  market  prices.
For   fiscal  years  ended  2005  and  2004,  the  reserves  were
$3,823,000 and $244,000, respectively.

There were no significant liquidations of LIFO inventories during
the fiscal years ended 2005 and 2004.

                               42
<PAGE>


(4)                                         Long-Term Debt

Long-term  debt consisted of the following at fiscal years  ended
(in thousands):


                                              2005     2004
                                              ----     ----
     Revolving credit facility             $ 63,500  $13,800
     Term credit facility                    50,000       --
     Capital lease obligations                1,664       --
     Notes payable to finance companies       8,344       --
     Other                                   10,536      335
                                            -------   ------
                                            134,044   14,135
     Less current installments               21,702    6,335
                                            -------   ------
     Long-term debt                        $112,342  $ 7,800
                                            =======   ======


The  Company  has  a $150,000,000 term/revolver  credit  facility
agreement,  which  matures November 2009.  The  Company  is  also
required  to  pay  a  commitment fee on the total  unused  credit
facility   amount.   Availability  under  the  revolving   credit
facility  at  fiscal  year  ended  2005  was  $36,500,000.    The
agreement  provides  for  a  five-year  commitment  and  contains
financial covenants which were in compliance at fiscal  year  end
2005.   The  term  facility requires quarterly  payments  in  the
amount  of  $2,500,000.   The revolver facility  requires  annual
payments  in an amount equal to 50% of excess cash flows  if  the
Company's ratio of Total Funded Debt of EBITDA is less than 2  to
1  and  an amount equivalent to proceeds received as a result  of
sale  of assets.  The Credit Facility is secured by substantially
all  personal  and investment property and incurs interest  at  a
floating rate of the London Interbank Offered Rate (LIBOR) plus a
spread  dependent upon the Company's total funded debt  level  to
cash  flows as defined.  The rate at the end of fiscal  2005  was
4.09%.

The  Company acquired certain equipment under capital leases with
its  acquisition  of Alstyle (see Note 9).  The  asset  value  of
$6,037,284  and the related accumulated amortization of  $524,521
at  February  28,  2005  is included in property  and  equipment.
Amortization  of  assets  under capital  leases  is  included  in
depreciation expense.

Notes payable to finance companies, with interest due monthly  at
5.25% to 9.46% principal paid in equal monthly installments.  The
notes mature at dates ranging from May 2005 through June 2009 and
are collateralized by certain equipment.

Notes  payable classified as "Other" are obligations  of  Alstyle
and  Crabar/GBF.   These  are loans to  individuals  with  annual
payments bearing interest at rates ranging from 4.0% to 8.0%  and
maturing  on  dates ranging from December 2005  through  November
2006.

Total interest paid in fiscal years ended 2005, 2004 and 2003 was
$2,755,000, $830,000 and $1,291,000, respectively.

                               43
<PAGE>

Excluding  capital lease obligations (see Note 13), the Company's
long-term  debt maturities for the five years following  February
28, 2005 are as follows (in thousands):

                  2006       $  19,743
                  2007          18,155
                  2008          10,771
                  2009          10,167
                  2010          73,544
                               -------
                              $132,380
                               =======


(5) Shareholders' Equity

In  fiscal  year  1999, the Company adopted a Shareholder  Rights
Plan,  which  provides that the holders of the  Company's  common
stock receive one preferred share purchase right (a "Right")  for
each  share  of the Company's common stock they own.  Each  Right
entitles  the  holder to buy one one-thousandth  of  a  share  of
Series  A Junior Participating Preferred Stock, par value  $10.00
per  share,  at a purchase price of $27.50 per one one-thousandth
of  a share, subject to adjustment.  The Rights are not currently
exercisable,  but  would  become exercisable  if  certain  events
occurred relating to a person or group acquiring or attempting to
acquire 15% or more of the outstanding shares of common stock  of
the  Company.  Under those circumstances, the holders  of  Rights
would be entitled to buy shares of the Company's common stock  or
stock  of  an  acquiror of the Company at a  50%  discount.   The
Rights expire on November 4, 2008, unless earlier redeemed by the
Company.   The Company's term/revolver credit facility  restricts
acquisition  of treasury shares and distributions to  holders  of
its capital securities.


(6)  Stock Options

At  fiscal  year ended 2005, the Company has two incentive  stock
option  plans: the 1998 Option and Restricted Stock Plan  amended
and  restated  as  of June 17, 2004 and the 1991 Incentive  Stock
Option  Plan.  The Company has 494,077 shares of unissued  common
stock  reserved  under  the stock option plans  for  issuance  to
officers and directors, and supervisory employees of the  Company
and  its subsidiaries.  The exercise price of each option granted
equals  the quoted market price of the Company's common stock  on
the  date  of grant, and an option's maximum term is  ten  years.
Options  may  be granted at different times during the  year  and
vest over a five-year period.

The  per  share  weighted-average fair value of  options  granted
during  fiscal years ended 2005, 2004 and 2003 was  $2.86,  $1.75
and  $1.96,  respectively, on the date of grant using  the  Black
Scholes  option-pricing model with the following weighted-average
assumptions for the fiscal years ended:

                                  2005       2004     2003
                                  ----       ----     ----

  Expected dividend yield         3.42%      4.38%    5.01%
  Stock price volatility         23.59%     23.24%   22.50%
  Risk-free interest rate         3.93%      2.89%    4.64%
  Expected option term          5 years    5 years  5 years

                               44
<PAGE>

Following is a summary of transactions of incentive stock options
during the three fiscal years ended in 2005:

                                                      Weighted
                                          Number       Average
                                            of        Exercise
                                          Shares        Price
                                          ------        -----
   Outstanding at February 2002
    (291,375 shares exercisable)         804,000       $9.20
   Granted                                35,000       13.28
   Terminated                             (6,750)      10.84
   Exercised                             (64,500)       9.19
                                         -------

   Outstanding at February 2003
    (376,438 shares exercisable)        767,750        $9.37
   Granted                               40,000        12.46
   Terminated                           (47,750)       11.34
   Exercised                            (60,825)       11.42
                                        -------

   Outstanding at February 2004
    (445,425 shares exercisable)        699,175        $9.23
   Granted                               48,700        16.05
   Terminated                           (12,000)       10.42
   Exercised                            (40,550)        9.61
                                         ------

   Outstanding at February 2005
    (511,250 shares exercisable)        695,325        $9.67
                                        =======


The  following table summarizes information about incentive stock
options outstanding at fiscal year ended 2005:
<TABLE>
<CAPTION>
                     Options Outstanding          Options Exercisable
                     -------------------          -------------------
                           Weighted
                            Average
                           Remaining   Weighted               Weighted
                          Contractual  Average                 Average
   Exercise     Number     Life (In    Exercise    Number     Exercise
    Prices   Outstanding    Years)      Price   Exercisable     Price
    ------   -----------    ------      -----   ------------    -----
   <C>         <C>           <C>        <C>       <C>        <C>
   $7.06 to
    $10.25    522,125        4.5       $  8.49     449,250    $  8.66
   11.06 to
    11.67      85,000        3.9         11.34      55,000      11.17
   13.28 to
    16.21      88,200        8.4         14.98       7,000      13.28
              -------                              -------
              695,325        4.9       $  9.67     511,250    $  9.00
              =======                              =======
</TABLE>
                               45
<PAGE>

(7)  Income Taxes

The components of the provision for income taxes for fiscal years
ended 2005, 2004, and 2003 are (in thousands):

                                       2005    2004     2003
                                       ----    ----     ----
  Current:
       Federal                       $13,254  $ 8,752  $ 8,688
       State, local and foreign        2,234    1,127    1,040
  Deferred                              (982)    1,060    (630)
                                      ------   ------   ------
  Total provision for income taxes   $14,506  $10,939  $ 9,098
                                      ======   ======   ======

  Total income taxes paid            $13,273  $10,208  $10,088
                                      ======   ======   ======


The  following  summary  reconciles the  statutory  U.S.  Federal
income tax rate to the Company's effective tax rate:

                                        2005      2004    2003
                                        ----      ----    ----

  Statutory rate                        35.0%     35.0%   35.0%
  Provision for state income taxes,
    net of Federal income tax benefit    3.9       2.8     2.8
  Other                                 (0.2)      0.1    (0.4)
                                        ----      ----    ----
         Effective tax rate             38.7%     37.9%   37.4%
                                        ====      ====    ====

The  components of deferred income tax assets and liabilities are
summarized as follows (in thousands) for fiscal years ended:

                                                   2005      2004
                                                   ----      ----
  Current deferred assets related to:
    Allowance for doubtful receivables          $  1,283    $  666
    Inventory valuation                            2,239       366
    Employee compensation and benefits             2,041     1,346
    Other                                            760       235
                                                  ------     -----
                                                $  6,323    $2,613
                                                 ======      =====
  Noncurrent deferred liability related to:
    Depreciation                               $  8,017     $6,480
    Intangibles amortization and impairments     17,651       (560)
    Prepaid pension cost                          2,540      2,027
    Partnership interest                            207        200
    Other                                           213        357
                                                 ------      -----
                                                $28,628     $8,504
                                                 ======      =====

                               46
<PAGE>


(8)  Employee Benefit Plans

The  Company  and  certain subsidiaries  have  a  noncontributory
defined  benefit  retirement plan covering approximately  20%  of
their employees.  Benefits are based on years of service and  the
employee's average compensation for the highest five compensation
years preceding retirement or termination.  The Company's funding
policy is to contribute annually an amount in accordance with the
requirements  of the Employee Retirement Income Security  Act  of
1974 (ERISA).

The  Company's  pension plan asset allocation  for  fiscal  years
ended 2005 and 2004, by asset category, is as follows:

                                             2005     2004
                                             ----     ----

     Equity Securities                         0%      44%
     Debt Securities                           0%      41%

     Cash and Cash Equivalents               100%      15%

     Total                                   100%     100%
                                             ====     ====


The Company's target asset allocation is 50.0% equities and 50.0%
fixed  income, with a 10.0% plus or minus factor based  upon  the
combined judgments of the Company's Administrative Committee  and
its  investment advisors.  The Plan's investments were liquidated
at  fiscal  year  end 2005 in anticipation of a transfer  of  the
account to a new trustee.  The larger than normal amounts in  the
Cash  and  Cash  Equivalents at fiscal year ended  2005  was  the
result  of  cash  contributions received at year end  which  were
subsequently invested per the target asset allocation after  year
end.

The Company estimates the long-term rate of return on plan assets
will  be  8.0%  based  upon  target asset  allocation.   Expected
returns  are  developed based upon the information obtained  from
the Company's investment advisors.  The advisors provide ten-year
historical  and  five-year expected returns on the  fund  in  the
target  asset  allocation.  The return  information  is  weighted
based  upon  the asset allocation at the end of the fiscal  year.
The  expected rate of return at the beginning of the fiscal  year
ended  2005  was  8.0%, the rate used in the calculation  of  the
current year pension expense.

Pension expense for fiscal years 2005, 2004 and 2003 included the
following components (in thousands):

                                   2005      2004      2003
                                   ----      ----      ----
  Service cost                    $1,470    $1,337    $1,475
  Interest cost                    2,417     2,359     2,554
  Expected return on plan assets  (2,663)   (2,193)   (2,483)
  Net amortization                   921       901       368
                                   -----     -----     -----

       Net periodic pension cost  $2,145    $2,404    $1,914
                                   =====     =====     =====

                               47
<PAGE>

Assumptions  used  to  determine  benefit  obligations  and   net
periodic pension cost for fiscal years 2005, 2004 and 2003 are as
follows:

                                       2005       2004        2003
                                       ----       ----        ----

   Weighted average discount rate     6.00%       6.50%       6.50%
   Earnings progression               3.50%       3.50%       4.50%
   Expected long-term rate of
     return on plan assets            8.00%       8.50%       9.25%


Amounts recognized in the consolidated balance sheets for  fiscal
years ended 2005 and 2004 consist of (in thousands):

                                                 2005        2004
                                                 ----        ----

   Prepaid benefit cost                         $7,548      $2,852
   Contributions                                 2,880       7,100
   Net periodic pension cost                    (2,145)     (2,404)
                                                 -----       -----
   Net amount recognized                        $8,283      $7,548
                                                 =====       =====

The  accumulated  benefit  obligation  for  the  defined  benefit
pension  plan  was  $35,766,000 for fiscal year  ended  2005  and
$34,667,000 for fiscal year ended 2004.

Assets  and  obligations for fiscal years 2005 and  2004  are  as
follows (in thousands):

                                              2005       2004
                                              ----       ----
  Projected benefit obligation:
  Beginning of year                        $ 41,340    $ 37,445
  Service and interest cost                   3,887       3,696
  Actuarial gain                                405       3,274
  Benefits paid                              (3,054)     (3,075)
                                             ------      ------

  End of year                              $ 42,578    $ 41,340
                                             ------      ------

  Fair value of plan assets:
  Beginning of year                        $ 34,791    $ 26,216
  Company contributions                       2,880       7,100
  Net gains                                   1,162       4,550
  Benefits paid                              (3,054)     (3,075)
                                             ------      ------

  End of year                              $ 35,779    $ 34,791
                                             ------      ------

  Funded status                              (6,800)     (6,549)
  Unrecognized losses                        16,616      15,775
  Prior service cost                         (1,533)     (1,678)
                                             ------      ------

  Total pension asset                      $  8,283    $  7,548
                                             ======      ======

                               48
<PAGE>

Estimated future benefit payments which reflect expected future
service, as appropriate, are expected to be paid (in thousands):

                       Year        Projected
                                   Payments
                       2005         $2,099
                       2006          3,519
                       2007          3,618
                       2008          4,384
                       2009          2,490
                    2010 - 2014     22,321


The  Company  has  401k  plans that are substantially  funded  by
employee   contributions.   The  Company   made   matching   401k
contributions in the amount of $187,000 in 2005.

(9)  Acquisitions and Disposal

The  Company  acquired all the outstanding shares in  its  merger
with  Alstyle  Apparel (Alstyle) on November 19,  2004.   Alstyle
shareholders  received 8,803,583 shares valued  at  approximately
$145,523,000   and   $2,889,000  cash.   Debt  of   approximately
$98,074,000  was assumed.  Alstyle produces and sells  activewear
apparel  through  6 facilities in California  and  Mexico  and  7
distribution  centers  located throughout the  U.S.  and  Canada.
Alstyle  was  acquired  to supplement and broaden  the  scope  of
products offered by Ennis.  The purchase price has been allocated
to  assets acquired and liabilities assumed based on fair  market
value  at the date of acquisition.  Approximately $37,774,000  of
goodwill  related  to Alstyle acquisition is deductible  for  tax
purposes.   The  purchase price of Alstyle  was  as  follows  (in
thousands of dollars):

        Ennis common stock
             issued 8,803,583
             shares                     $145,523
        Cash                               2,889
        Alstyle debt assumed              98,074
                                         -------

        Purchase price of Alstyle       $246,486
                                         =======

On  November 1, 2004, the Company acquired 100% of the  stock  of
Royal  Business  Forms,  Inc., (Royal) a privately  held  company
headquartered  in  Arlington,  Texas  for  $3,700,000  in   Ennis
treasury stock (approximately 178,000 shares).  Royal has been in
existence  and operating in Arlington, Texas since 1959  and  has
customers throughout the United States.  The acquisition of Royal
continues   the   Ennis  strategy  of  growth   through   related
manufactured  products for Ennis' existing  customer  base.   The
acquisition  will  add additional short-run  print  products  and
solutions and financial documents sold through the indirect sales
(distributorship) marketplace.

Effective June 30, 2004, the Company completed its acquisition of
all   of   the   outstanding  stock  of  Crabar/GBF,   Inc.   for
approximately $18,000,000 with consideration in the form of  debt
assumed and cash.  The primary reason for the acquisition was  to
increase Ennis' market share.  However, Crabar/GBF, Inc. will add
high-quality  long  and medium run print production,  along  with
pressure  sensitive label and form-label combinations  to  Ennis'
current line of medium and short run

                               49
<PAGE>

print products and solutions.  The transaction was financed  with
$11,000,000  in  bank loans with the balance  being  provided  by
internal cash resources.

The   Company  has  recognized  certain  costs  related  to  exit
activities  and integration costs attributable to the  Crabar/GBF
acquisition.  These costs totaling approximately $1,500,000  were
recognized  as  part of the assumed liabilities and  included  in
"Other  -  Accrued Expenses" in the Consolidated  Balance  Sheet.
The costs were primarily related to contracts related to previous
owners.   Other  costs  include lease exit  costs  and  severance
payments.

The following is a summary of the purchase price allocation (in
thousands):

                                    Crabar   Royal   Alstyle
                                    ------   -----   -------

   Cash                            $   133   $  601  $  3,187
   Accounts receivable, net          7,553    1,125     4,457
   Other receivables                 1,082       --       639
   Prepaid expenses                    298       76     1,451
   Other current assets                 --      211     1,697
   Inventories                       4,435    1,985    55,801
   Fixed assets                      8,087      808    21,033
   Goodwill                          5,956       --   138,134
   Trademarks                           80       --    61,000
   Customer list                     1,760       --    22,000
   Other identifiable intangibles       92       --     3,763
   Accounts payable and accrued
     liabilities                    11,476    1,106    66,676
                                    ------    -----   -------
                                   $18,000   $3,700  $246,486
                                    ======    =====   =======


The  results of operations for Alstyle, Royal and Crabar/GBF  are
included in the Company's consolidated financial statements  from
the dates of acquisition.  The following table represents certain
operating  information on a pro forma basis as though  all  three
companies  had  been  acquired as of March  1,  2003,  after  the
estimated   impact  of  adjustments  such  as   amortization   of
intangible assets, interest expense, and related tax effects  (in
thousands except per share amounts):

                                              Unaudited
                                              ---------
                                            2005      2004
                                            ----      ----
         Net  sales                       $567,700  $545,686
         Net  earnings                      30,595    18,062
         Net earnings per share-basic         1.09       .71
         Net  earnings per share-diluted      1.08       .70

The  pro  forma  results are not necessarily indicative  of  what
would  have  occurred if the acquisitions had been in effect  for
the periods presented.

                               50
<PAGE>

(10) Goodwill and Other Intangible Assets
     ------------------------------------
Goodwill  represents the excess of the purchase  price  over  the
fair  value  of  net  assets of acquired businesses  and  is  not
amortized.    Goodwill  and  indefinite-lived   intangibles   are
evaluated  for impairment on an annual basis, or more  frequently
if  impairment  indicators arise, using a  fair-value-based  test
that  compares the fair value of the asset to its carrying value.
Fair  values are typically calculated using a factor of  expected
earnings  before interest, taxes, depreciation, and amortization.
Based  on  this  evaluation,  no impairment  was  recorded.   The
Company  must  make assumptions regarding estimated  future  cash
flows  and  other  factors to determine the  fair  value  of  the
respective assets in assessing the recoverability of its goodwill
and  other  intangibles.   If  these  estimates  or  the  related
assumptions  change,  the  Company  may  be  required  to  record
impairment charges for these assets in the future.

Intangible  assets  with determinable lives are  amortized  on  a
straight-line basis over the estimated useful life.  The cost  of
trademarks  is  based on fair values at the date of  acquisition.
Trade  names  with  determinable lives and a net  book  value  of
$1,090,000  at fiscal year end 2005 are amortized on a  straight-
line  basis  over  the estimated useful life (between  5  and  10
years).   Trademarks with indefinite-lived lives with a net  book
value  of  $61,000,000 at fiscal year end 2005 are evaluated  for
impairment on an annual basis.

The cost of purchased trade names is based on appraised values at
the date of acquisition and is amortized on a straight-line basis
over  the estimated useful life (between 10 and 15 years) of such
trade  names.   The  Company assesses the recoverability  of  its
definite-lived intangible assets primarily based on  its  current
and anticipated future undiscounted cash flows.

The Company's amortization expense for the next five years is  as
follows:

                   2006             $1,975,000
                   2007             $1,917,000
                   2008             $1,795,000
                   2009             $1,792,000
                   2010             $1,776,000












                               51
<PAGE>
The changes in the carrying amount of intangibles for the fiscal
years ended 2005 and 2004 are as follows:

<TABLE>
<CAPTION>
                   Forms   Promotional  Financial  Apparel
                 Solutions  Solutions   Solutions Solutions
                   Group      Group       Group     Group       Total
                   -----      -----       -----     -----       -----

<S>              <C>        <C>         <C>        <C>        <C>
Balance as of
  March 1, 2003  $14,933   $6,579       $14,014    $   --     $ 35,526
Trademarks
  amortization      (131)      --            --        --         (131)
Goodwill
  Acquired
  during the
  year               179       --            --        --          179
                  ------   ------        ------   -------      -------

Balance as of
  fiscal year
  ended 2004     14,981    6,579         14,014        --       35,574
Trademarks
  Acquired
  during the
  year               80       --             --    61,000       61,080
Trademarks
  amortization     (183)      --             --        --         (183)
Customer list
  Acquired
  during the
  year            1,760       --             --    22,000       23,760
Customer list
  amortization     (117)      --             --      (367)        (484)
Other
  Intangibles
  Acquired
  during the
  year               --       --             --        --           --
Other
  amortization       --       --             --        --           --
Goodwill
  Acquired
  during the
  year            5,956       --             --    138,134     144,090
                 ------    ------        ------    -------     -------

Balance as of
  fiscal year
  ended 2005     $22,477   $6,579       $14,014   $220,767    $263,837
</TABLE>

(11) Segment Information

In  February  of  2005,  the  Company  announced  a  change  in
management in which the Forms Solutions, Promotional  Solutions
and  Financial  Solutions Groups began  reporting  to  a  newly
created executive officer position. This officer reports to the
President and CEO, as does the President of the Apparel  Group.
The  Company will now report in two operational segments -  the
Printing  Segment and the Apparel Segment.  The first group  in
the Printing Segment, the Forms Solutions Group is primarily in
the  business of manufacturing and selling business  forms  and
other  printed  business  products  primarily  to  distributors
located in the United States.  The second group in the Printing
Segment,  Promotional Solutions Group, is primarily engaged  in
the  business  of  design, manufacturing  and  distribution  of
printed    and   electronic   media,   presentation   products,
flexographic  printing,  advertising  specialties  and  Post-it
(registered trademark) Notes.  The third group in the  Printing
Segment,  the  Financial Solutions Group, designs, manufactures
and  markets  printed forms and specializes  in  internal  bank
forms,  secure  and negotiable documents and  custom  products.
The second segment, Apparel Solutions Group, which consists  of
the newly acquired Alstyle, is primarily engaged in the product
and  sales of activewear including t-shirts, fleece goods,  and
other   wearables.   Corporate  information  is   included   to
reconcile segment data to the consolidated financial statements
and  includes  assets  and expenses related  to  the  Company's
corporate  headquarters  and other  administrative  costs.   As
indicated   in   the  Management's  Discussion  and   Analysis,
Management intends to operate and report these segments as  the
Printing Segment and the Apparel Segment in future periods.
                               52
<PAGE>
Segment data for the fiscal years ended 2005, 2004 and 2003  were
as follows (in thousands):
<TABLE>
<CAPTION>
                                           Apparel
                   Printing Segment        Segment
              -------------------------    -------
              Forms  Promotional Financial   Apparel
             Solutions  Solutions Solutions  Solutions          Consolidated
              Group     Group     Group     Group  Corporate    Totals
              -----     -----     -----     -----  ---------    ------
  <S>       <C>        <C>        <C>       <C>    <C>         <C>
  Fiscal
   year
   ended
   2005:
  Net       $177,618   $83,881     $47,809   $56,045   $    --   $365,353
  sales
  Depreci-
   ation       3,356     2,455       2,141     1,878       537     10,367
  Amorti-
   zation        283        --          --       426        --        709
  Segment

  earnings
   (loss)
   before
   income     25,761    11,168       7,346     3,575   (10,385)    37,465
   taxes
  Segment
   assets     90,950    45,514      33,230   312,788    14,764    497,246
  Capital
   expendi-
   tures       1,313     1,332        557        237     2,704      6,143

  Fiscal
   year
   ended
   2004:
  Net       $142,006  $67,024    $50,330         --    $    --  $259,360
  sales
  Depreci-
   ation       3,288    2,355      2,959         --        614     9,216
  Amorti-
   zation        132       --         --         --         --       132
  Segment

  earnings
   (loss)
   before
   income     21,830    7,433      6,876         --        (7,249)   28,890
   taxes
  Segment
   assets     68,950   33,287     36,004         --        15,802   154,043
  Capital
   Expendi-
   tures       1,408      620      1,011         --         1,504     4,543

  Fiscal
   year
   ended
   2003:
  Net       $118,763  $70,847    $51,147         --        $    --   $240,757
  sales
  Depreci-
   ation       2,829    2,320      3,174         --            833      9,156
  Amorti-
   zation         38       --         --         --             --         38
  Segment

  earnings
   (loss)
   before
   income     18,850    6,670      4,916         --         (6,091)    24,345
   taxes
  Segment
   assets     63,232   38,563     39,730         --         11,012    152,537
  Capital
  expendi-
   tures         631      699        772         --          1,661      3,763
</TABLE>

"Post-it" is a registered trademark of 3M.

                               53
<PAGE>

(12) Quarterly Information (Unaudited)
(In thousands, except per share amounts)

For the Three Months Ended    May 31    August   November February 28
                                            31         30
--------------------------    ------  -------- ---------- -----------
Fiscal year ended 2005:
     Net sales               $65,736   $73,374    $91,750    $134,493
     Gross profit             17,060    19,352     22,874      31,471
     Net earnings              4,582     5,370      6,104       6,903
     Dividends paid            2,542     2,546      2,546       3,939
     Per share of common
     stock:
       Basic net earnings        .28       .33        .36         .27
       Diluted net earnings      .27       .32        .35         .27
       Dividends                .155      .155       .155        .155

                              May 31  August    November  February 29
                                        31         30
                              ------ --------  ---------- -----------
Fiscal year ended 2004:
     Net sales               $64,874   $65,003    $66,398     $63,085
     Gross profit             16,550    17,507     17,574      16,917
     Net earnings              4,104     4,497      4,475       4,875
     Dividends paid            2,533     2,535      2,537       2,541
     Per share of common
     stock:
       Basic net earnings        .25       .28        .27        .30
       Diluted net earnings      .25       .27        .27         .29
       Dividends                .155      .155       .155        .155


                               54
<PAGE>

(13) Commitments and Contingencies

The  Company  leases its facilities under operating  leases  that
expire  on various dates through fiscal year ended 2011.   Future
minimum lease commitments and sublease income under noncancelable
operating  leases  for each of the fiscal  years  ending  are  as
follows (in thousands):


                        Operating
                          Lease     Sublease
                       Commitments   Income      Net
                       -----------   ------      ---
            2006           $11,718   $(1,192)   $10,526
            2007             7,228    (1,253)     5,975
            2008             6,400    (1,276)     5,124
            2009             4,683      (106)     4,577
            2010             1,549         --     1,549
            Thereafter       1,340         --     1,340
                           -------   --------   -------
                           $32,918   $(3,827)   $29,091
                           =======   ========   =======

Rent  expense  attributable  to such leases  totaled  $5,837,000,
$2,407,000  and $2,550,000 for the fiscal years ended 2005,  2004
and 2003, respectively.

Annual maturities of capital lease obligations are as follows (in
thousands):

            2006                             $  950
            2007                                628
            2008                                136
            2009                                 24
                                             ------
                                              1,738
            Amount representing interest       (74)
                                             ------
                                             $1,664
                                              =====


In  the ordinary course of business, the Company also enters into
real  property  leases, which require the Company  as  lessee  to
indemnify  the  lessor  from  liabilities  arising  out  of   the
Company's   occupancy   of   the   properties.    The   Company's
indemnification  obligations  are  generally  covered  under  the
Company's general insurance policies.

The  Company  is  party  to various claims,  legal  actions,  and
complaints  arising  in  the ordinary  course  of  business.  The
Company  is self-insured with respect to potential losses related
to  workers'  compensation  claims  and  health  insurance.   The
Company maintains reserves for anticipated self-insurance losses.
Although  the  results  of  any litigation  or  claim  cannot  be
predicted with certainty, management believes that the outcome of
pending  litigation  and claims, when considered  in  conjunction
with  self-insurance  reserves  established,  will  not  have   a
material  adverse  effect  on the Company's  financial  position,
results of operations or cash flows.

                               55
<PAGE>

(14) Subsequent Events

On March 15, 2005, the Company declared a quarterly cash dividend
of  15  1/2  cents a share on its common stock and  has  set  the
record date for the Annual Shareholder Meeting.  The dividend was
paid  May  2, 2005 to shareholders of record on April  15,  2005.
April  15,  2005  also  has  been set  as  the  record  date  for
shareholders  entitled to notice of and to  vote  at  the  Annual
Meeting of Shareholders to be held on June 16, 2005.

                               56
<PAGE>



     Report of Independent Registered Public Accounting Firm



Board of Directors and
Shareholders of Ennis, Inc.


We  have  audited the accompanying consolidated balance sheet  of
Ennis,  Inc.  (the "Company"), as of February 28, 2005,  and  the
related   consolidated  statements  of  earnings,   stockholders'
equity, and cash flows for the year ended February 28, 2005.  Our
responsibility  is  to express an opinion on  these  consolidated
financial statements based on our audits.

We  conducted our audit in accordance with the standards  of  the
Public Company Accounting Oversight Board (United States).  Those
standards  require that we plan and perform the audit  to  obtain
reasonable  assurance about whether the financial statements  are
free of material misstatement.  Our audit included examining,  on
a  test basis, evidence supporting the amounts and disclosures in
the  financial  statements, assessing the  accounting  principles
used and significant estimates made by management, and evaluating
the  overall  financial statement presentation.  We believe  that
our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the consolidated
financial  position of Ennis, Inc., as of February 28, 2005,  and
the  results  of its consolidated operations and its consolidated
cash  flows  for the year ended February 28, 2005, in  conformity
with  accounting  principles generally  accepted  in  the  United
States of America.

We  also  have audited, in accordance with the standards  of  the
Public  Company Accounting Oversight Board (United  States),  the
effectiveness  of the Company's internal control  over  financial
reporting  as of February 28, 2005, based on criteria established
in  Internal Control-Integrated Framework issued by the Committee
of  Sponsoring Organizations of the Treadway Commission, and  our
report  dated May 6, 2005, expressed an unqualified opinion  with
respect  to  management's assessment of internal control  and  an
adverse  opinion  with respect to the Company's internal  control
over financial reporting as of February 28, 2005.



                     /s/ Grant Thornton LLP
Dallas, Texas
May 16, 2005

                               57
<PAGE>
Management's Report on Internal Control Over Financial Reporting

   Our   management   is   responsible   for   establishing   and
maintaining  adequate internal control over financial  reporting.
Internal  control over financial reporting is a process  designed
by,  or  under  the supervision of, our principal  executive  and
financial  officers,  and  effected by our  board  of  directors,
management  and other personnel, to provide reasonable  assurance
regarding  the  reliability  of  financial  reporting   and   the
preparation  of  consolidated financial statements  for  external
purposes   in  accordance  with  generally  accepted   accounting
principles and includes those policies and procedures that:

    (bullet)  Pertain  to the maintenance of records that  in
              reasonable   detail   accurately   and   fairly
              reflect  the  transactions and dispositions  of
              the assets of our company.

    (bullet)  Provide  reasonable assurance that transactions
              are    recorded   as   necessary   to    permit
              preparation    of    consolidated     financial
              statements   in   accordance   with   generally
              accepted  accounting principles, and  that  our
              receipts  and expenditures are being made  only
              in   accordance  with  authorizations  of   our
              management and directors.

    (bullet)  Provide    reasonable    assurance    regarding
              prevention  or timely detection of unauthorized
              acquisition, use or disposition of  our  assets
              that  could  have  a  material  effect  on  our
              consolidated financial statements.

   Management  assessed  our  internal  control  over   financial
reporting  as  of February 28, 2005, the end of our fiscal  year.
Management  based  its  assessment  on  criteria  established  in
Internal Control-Integrated Framework issued by the Committee  of
Sponsoring  Organizations of the Treadway  Commission,  or  COSO.
Management's assessment included evaluation of such  elements  as
the design and operating effectiveness of key financial reporting
controls,  process  documentation, accounting policies,  and  our
overall control environment for all of the Company's subsidiaries
other than Alstyle Apparel, Inc. (Alstyle).  Alstyle was acquired
on  November 19, 2004 and as of February 28, 2005 Alstyle's total
assets  represent 63% of consolidated total assets. The  revenues
of Alstyle represent 15% of consolidated net revenue for the year
ended  February  28, 2005. Through discussions  with  consultants
regarding Management's assessment, and with our external auditors
regarding   the   audit  of  internal  controls  over   financial
reporting,  the Board and Management have concluded that  due  to
the  late  date of acquiring Alstyle that it is not  possible  to
conduct a complete assessment of Alstyle's internal control  over
financial reporting in the period between November 19, 2004  (the
date  of  acquisition)  and  February  28,  2005  (the  date   of
management's assessment). However as the year-end financial close
occurred, it was concluded that the issues described below should
be disclosed as of February 28, 2005.

   An  internal  control material weakness is  a  deficiency,  or
combination of deficiencies, that results in more than  a  remote
likelihood that a material misstatement of the annual or  interim
financial statements will not be prevented or detected.

   Based  upon  management's understanding of   internal  control
over  financial reporting at Alstyle as of February 28, 2005  and
as  part  of  the  integration process  currently  undergoing  to
integrate   Alstyle's  accounting  systems  into  the   Company's
JDEdwards  ERP  system, management has identified  the  following
material weaknesses in internal controls over financial reporting
from an acquired entity that should be disclosed.

   Related  to  the  acquisition of Alstyle,  which  occurred  on
November  19, 2004, we identified insufficient controls over  the
accounting  for  assets acquired which we believe  constitutes  a
material   weakness.    In  addition,   we   believe   that   the
insufficiency  of controls existing over the financial  reporting
function at Alstyle, also constitutes a material weakness.  These
weaknesses are expected to be corrected as the Company integrates
Alstyle's financial systems into the JDEdwards ERP system as part
of  the ongoing integration of Alstyle into the Company and  with
additional staffing and training.1

   While   not  originally  scheduled  to  be  included  in   our
assessment  of  internal  control  due  to  the  timing  of   the
acquisition; management felt that due to the material  weaknesses
described  in  the preceding paragraphs, management  must  report
that

                               58
<PAGE>

it  believes that, as of February 28, 2005, our internal  control
over  financial reporting due to the acquisition of  Alstyle  was
not effective based on the COSO criteria.

   Our  independent  registered  public  accounting  firm,  Grant
Thornton  LLP,  has issued an attestation report on  management's
assessment  of  the  Company's internal  control  over  financial
reporting, which is included below.

Completed  and  Planned Remediation Actions to  Address  Internal
Control Weaknesses
----------------------------------------------------------------
   Management  believes  that actions that we  have  taken  since
February 28, 2005 and actions that will be taken in fiscal  2006,
along with other improvements yet to be formally identified, will
address  the  material  weaknesses in our internal  control  over
financial  reporting  noted  above.  Some  of  these  remediation
actions are discussed below.

   In   relation  to  the  material  weakness  related   to   the
accounting for assets acquired, we plan to strengthen and improve
our   accounting  capabilities  through  improved  staffing   and
training in fiscal 2006.

       In  relation  to  the  material  weakness  over  financial
reporting  at Alstyle, we plan to take the following  actions  in
2006:

    (bullet)  Corporate   information   systems   will   be
              redesigned  and  implemented to  confirm  the
              proper, necessary and appropriate levels  and
              breadth  of  access and control to functional
              areas of our systems, all in conjunction with
              the integration process.

    (bullet)  Reconciliations  of account balances  will  be
              prepared  timely and thoroughly  and  properly
              be reviewed and documented.


Inherent Limitations on Effectiveness of Controls
----------------------------------------------------------------

   Ennis'  management, including our CEO and CFO, does not expect
that our disclosure controls, including our internal control over
financial  reporting, will prevent or detect all  error  and  all
fraud.  A  control  system,  no  matter  how  well  designed  and
operated,  can  provide only reasonable, not absolute,  assurance
that the control system's objectives will be met. The design of a
control  system  must reflect the fact that  there  are  resource
constraints,  and  the benefits of controls  must  be  considered
relative  to  their  costs.  Further,  because  of  the  inherent
limitations in all control systems, no evaluation of controls can
provide  absolute assurance that misstatements due  to  error  or
fraud will not occur or that all control issues and instances  of
fraud,  if  any,  within the company have  been  detected.  These
inherent  limitations  include the realities  that  judgments  in
decision-making  can  be  faulty and that  breakdowns  can  occur
because  of  simple  error  or  mistake.  Controls  can  also  be
circumvented by the individual acts of some persons, by collusion
of two or more people, or by management override of the controls.
The  design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there  can
be  no  assurance that any design will succeed in  achieving  its
stated  goals under all potential future conditions.  Projections
of any evaluation of controls effectiveness to future periods are
subject  to  risks.  Over time, controls  may  become  inadequate
because  of changes in conditions or deterioration in the  degree
of compliance with policies or procedures.


Changes in Internal Control Over Financial Reporting
----------------------------------------------------------------

   There  have  been  no  changes in our  internal  control  over
financial  reporting during the quarter ended February  28,  2005
that  have  materially  affected, or  are  reasonably  likely  to
materially affect, our internal control over financial reporting.
The  discussion  above under "Completed and  Planned  Remediation
Actions  to  Address  Internal Control  Weaknesses"  describes  a
number  of changes we have made since February 28, 2005  that  we
believe  have  materially  improved  our  internal  control  over
financial reporting, as well as other improvements that  we  plan
to make in fiscal 2006.

                               59
<PAGE>

     Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Ennis, Inc.

   We  have  audited  management's  assessment  included  in  the
accompanying   Management's  Report  on  Internal  Control   Over
Financial  Reporting, that Ennis, Inc. did not maintain effective
internal  control  over financial reporting as  of  February  28,
2005, because of the effect of the material weaknesses identified
in management's assessment and described below, based on criteria
established  in Internal Control-Integrated Framework  issued  by
the   Committee  of  Sponsoring  Organizations  of  the  Treadway
Commission  (the  COSO  criteria).  Ennis,  Inc.  management   is
responsible  for  maintaining  effective  internal  control  over
financial  reporting and for its assessment of the  effectiveness
of  internal control over financial reporting. Our responsibility
is  to  express  an  opinion on management's  assessment  and  an
opinion  on  the effectiveness of the company's internal  control
over financial reporting based on our audit.

   We  conducted  our audit in accordance with the  standards  of
the  Public  Company Accounting Oversight Board (United  States).
Those  standards require that we plan and perform  the  audit  to
obtain  reasonable  assurance about  whether  effective  internal
control  over financial reporting was maintained in all  material
respects.  Our  audit  included  obtaining  an  understanding  of
internal    control   over   financial   reporting,    evaluating
management's  assessment, testing and evaluating the  design  and
operating effectiveness of internal control, and performing  such
other procedures as we considered necessary in the circumstances.
We  believe  that our audit provides a reasonable basis  for  our
opinion.

   A  company's  internal control over financial reporting  is  a
process  designed to provide reasonable assurance  regarding  the
reliability  of  financial  reporting  and  the  preparation   of
financial  statements for external purposes  in  accordance  with
generally  accepted  accounting principles. A company's  internal
control  over  financial reporting includes  those  policies  and
procedures  that (1) pertain to the maintenance of records  that,
in   reasonable  detail,  accurately  and  fairly   reflect   the
transactions  and dispositions of the assets of the company;  (2)
provide  reasonable assurance that transactions are  recorded  as
necessary  to  permit  preparation  of  financial  statements  in
accordance  with  generally accepted accounting  principles,  and
that receipts and expenditures of the company are being made only
in  accordance with authorizations of management and directors of
the  company;  and  (3)  provide reasonable  assurance  regarding
prevention or timely detection of unauthorized acquisition,  use,
or disposition of the company's assets that could have a material
effect on the financial statements.

   Because  of  its inherent limitations, internal  control  over
financial  reporting  may  not prevent or  detect  misstatements.
Also,  projections of any evaluation of effectiveness  to  future
periods  are  subject  to  the  risk  that  controls  may  become
inadequate  because of changes in conditions, or that the  degree
of compliance with the policies or procedures may deteriorate.

   A  material  weakness is a control deficiency, or  combination
of  control  deficiencies, that results in  more  than  a  remote
likelihood that a material misstatement of the annual or  interim
financial statements will not be prevented or detected.

   We  identified  a  material weakness relating to  insufficient
controls  over the accounting for assets acquired in the  Alstyle
Apparel Inc. (Alstyle) acquisition which occurred on November 19,
2004.

As  described  in Management's Annual Report on Internal  Control
over  Financial Reporting, management excluded Alstyle  from  its
assessment  of  internal control over financial reporting  as  of
February  28,  2005  because ownership interest  in  Alstyle  was
acquired  by  the  Company late in fiscal  2005.   We  have  also
excluded  Alstyle  from  our  audit  of  internal  control   over
financial reporting.  However, during the course of our audit  of
the  consolidated  financial statements, we  became  aware  of  a
material  weakness related to the insufficiency of controls  over
financial reporting at Alstyle.  Alstyle's total assets represent
63% of

                               60
<PAGE>

consolidated  total assets as of February 28, 2005. The  revenues
of Alstyle represent 15% of consolidated net revenue for the year
ended February 28, 2005.

   These  material weaknesses were considered in determining  the
nature, timing, and extent of audit tests applied in our audit of
the  fiscal  2005  consolidated financial  statements,  and  this
report  does  not affect our report dated May 6,  2005  on  those
consolidated financial statements.

   In  our opinion, management's assessment that Ennis, Inc.  did
not  maintain effective internal control over financial reporting
as  of  February  28,  2005, is fairly stated,  in  all  material
respects,  based  on  the  COSO control criteria.  Also,  in  our
opinion, because of the effect of the material weakness described
above  on  the  achievement  of the  objectives  of  the  control
criteria,  Ennis,  Inc  has  not  maintained  effective  internal
control  over financial reporting as of February 28, 2005,  based
on the COSO control criteria.

      We do not express an opinion or any other form of assurance
on   management's  statement  referring  to  the  integration  of
Alstyle's  financial  systems  into  the  JDEdwards  ERP  system,
additional  staffing and training and management's  completed  an
planned   remediation   actions  to  address   internal   control
weaknesses.

Grant Thornton LLP
May 16, 2005




























                               61
<PAGE>


     Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders
Ennis, Inc.

We  have  audited the accompanying consolidated balance sheet  of
Ennis,  Inc.  and subsidiaries (the Company) as of  February  29,
2004   and  the  related  consolidated  statements  of  earnings,
shareholders' equity and cash flows for each of the two years  in
the  period  ended February 29, 2004.  These financial statements
are   the  responsibility  of  the  Company's  management.    Our
responsibility  is  to  express an  opinion  on  these  financial
statements based on our audits.

We  conducted our audits in accordance with the standards of  the
Public Company Accounting Oversight Board (United States).  Those
standards  require that we plan and perform the audit  to  obtain
reasonable  assurance about whether the financial statements  are
free of material misstatement.  We were not engaged to perform an
audit of the Company's internal control over financial reporting.
Our   audit  included  consideration  of  internal  control  over
financial  reporting  as a basis for designing  audit  procedures
that  are  appropriate  in the circumstances,  but  not  for  the
purpose  of  expressing an opinion on the  effectiveness  of  the
Company's    internal    control   over   financial    reporting.
Accordingly, we express no such opinion.  An audit also  includes
examining,  on a test basis, evidence supporting the amounts  and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating  the  overall  financial statement  presentation.   We
believe  that  our  audits  provide a reasonable  basis  for  our
opinion.

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the consolidated
financial position of Ennis Inc. and subsidiaries as of  February
29,  2004  and  the consolidated results of their operations  and
their  cash  flows for each of the two years in the period  ended
February  29,  2004,  in conformity with U.S. generally  accepted
accounting principles.


                              /s/ Ernst & Young LLP


Dallas, Texas
April 14, 2004











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